MNCs in the News-2018-03-30


In the wake of a dispute filing by the United States (US) Trade Representative (USTR) at the World Trade Organization (WTO) calling for consultations, China’s Ministry of Commerce (MOFCOM) said China will “properly handle the request for consultations.” In its consultation request, which was submitted to the WTO dispute resolution system, the USTR stated China had not been complying with its WTO obligations pertaining to the “‘conditions for technology licensing.’” China said it valued intellectual property rights (IPR) and had “always respected WTO rules” (Zhong Nan, “China will Properly Handle IP Rights Protection: Ministry,” China Daily, March 24, 2018,

To protect American technology as well as punish China for its failure to protect American IPR and open its tech sector to American companies, the US Treasury Department, exploiting a US law “reserved for national emergencies” and other bases, is considering banning Chinese companies from investing in sensitive technology sectors. On top of this, there is legislation being considered in the US Congress which would strengthen the Committee on Foreign Investment in the United States (CFIUS)’s review processes (Andrew Mayeda, Saleha Mohsin, and David McLaughlin, “U.S. Weighs Use of Emergency Law to Curb Chinese Takeovers,” Bloomberg, March 27, 2018,

Massive amounts of Chinese FDI in Australia and its prominence in sensitive areas like infrastructure and land have provoked much concern about China’s influence over Australia. The head of Australia’s Foreign Investment Review Board, a former spy official and Ambassador, said there is no need to worry and Australia needs China’s capital to foster development. Australia’s new Critical Infrastructure Centre has created a registry of assets that facilitates assessing risks relating to critical infrastructure and the country passed legislation designed to protect critical infrastructure (Michael Heath, “Australia Should Chill Out about Chinese Cash, Watchdog Says,” Bloomberg, March 28, 2018,


As the Japanese government tries to cut prices of brand-name medicines and push generics to check rising healthcare costs for the aging country, Japan’s Takeda confirmed it is considering a takeover bid for Irish drugmaker Shire to expand overseas. Reuters estimates the takeover could cost the Japanese company more than USD $40 billion. The move follows Takeda’s takeover of United States cancer firm Ariad and Belgian biotech group TiGenix (“Takeda eyes takeover of Ireland-based drugmaker Shire,” Japan Today, March 29, 2018,'s-takeda-eyes-takeover-of-shire; Kate Holton and Thomas Wilson, “Drugmaker Shire soars as Japan’s Takeda considers bid,” Reuters, March 28, 2018,

Japan’s Softbank Group is leveraging its Vision Fund in conjunction with Saudi Arabia’s Vision 2030 program to boost solar production in the Arab country following the signing of a memorandum of understanding between the two parties. Softbank pledged USD $1 billion towarsds an initial $5 billion, 7.2 gigawatt expansion of solar capacity in Saudi Arabia. Softbank plans to invest around $25 billion in solar infrastructure and state-owned Saudi firms over the next few years to help the country’s energy diversity (“Softbank Vision Fund and Saudi Arabia to create world’s largest solar power firm,” The Japan Times, March 28, 2018,

South Korea

Tirebank announced its intentions to take over fellow South Korean company Kumho Tire from the country’s state-owned Korea Development Bank (KDB) following complications between Kumho’s workers union and Chinese buyer Doublestar. Tirebank said it had the support of non-Chinese foreign investors and was amassing funds to acquire Kumho. Given Kumho’s union continues to reject Chinese ownership and the KDB will not lend money to Tirebank, Kumho will likely enter court receivership unless the tire maker’s union and management reach an agreement before March 30 (Park Jae-hyuk, “Tirebank’s bid complicates sale of Kumho Tire,” The Korea Times, March 28, 2018,

The recent renegotiation of the South Korea-United States Free Trade Agreement (KORUS FTA) drove South Korea’s Hyundai Motor Company to shift production of its new pick-up truck model from Korea to the US state of Alabama. The heightened import duties that arose from the KORUS FTA renegotiation specifically motivated the decision. Hyundai now has to decide if it should cut production of an existing vehicle model and also decide which model it should cut in the wake of new US based pick-up line (Jung Min-hee, “Hyundai Motor Company Predicted to Produce Pick-up Trucks in Alabama,” BusinessKorea, March 28, 2018,


Indonesia’s state-owned energy firm Pertamina reports that it secured a contract with the Iranian government to take an 80 percent stake in Iran’s Mansouri oil field. However, Pertamina is uncomfortable with its large share and is actively looking for other investors. Tehran has set a deadline of early May for Pertamina to find partners and complete the deal. Pertamina estimates it will need to invest approximately USD $6 billion on the oil field over the next two decades to develop the field’s production potential (“Pertamina to take over Iran’s Mansouri field early May,” The Jakarta Post, March 28, 2018,

Jakarta has put forth a simplified tax holiday scheme in a bid to boost FDI flows into the country. Indonesia’s Finance Minister will sign the revised rules next week which will allow companies to apply for income tax benefits when they apply for investment permits. The government also has clarified investment size requirements and their corresponding benefits. Indonesia’s Pertamina and its Saudi partner Saudi Aramco will be some of the first to receive the new benefits in conjunction with their plans to upgrade a refinery (Wilda Asmarini, “Indonesia to offer investors a simplified tax-holiday program,” Reuters, March 30, 2018,


Thailand’s cabinet has approved a USD $7.22 billion high-speed rail project aimed at linking three airports in the country. The project will be open to public and private partners to be selected in October. The railway project is part of Bangkok’s larger infrastructure investment initiative aimed at upgrading railways, roads, airports, and seaports after the ruling military junta found the country to be lagging behind its neighbors. The projects will also accommodate the country’s increasing numbers of tourists (Kitiphong Thaichareon, “Thailand approves $7.2 billion high-speed rail project to link airports,” Reuters, March 27, 2018,

Japanese electric vehicle producers are flocking to Thailand in the wake of government promotion packages. Honda announced plans to invest USD $160 million to locally manufacture cars, batteries and critical components for hybrid electric vehicles (HEVs) as Thailand’s Board of Investment recently implemented a new incentive scheme to promote plug-in HEVs and battery electric vehicles (BEVs). FOMM also stated plans to apply for and act on government incentives to produce 10,000 BEVs. Energy Absolute is seeking a Thai partner to help its assembly processes in Thailand (Piyachart Maikaew, “Made in Thailand: Honda plans HEVs,” Bangkok Post, March 28, 2018,


Vietnamese officials ordered the joint venture (JV) between Malaysia’s Yinson Holdings and PetroVietnam to stop operations in the Ca Rong Do offshore oil field. The Malaysian-Vietnamese JV, which has a USD $1 billion contract with Spain’s Repsol to service the oil field, has reached out to Hanoi to find a solution to the problem. It is reported China pressured Vietnam to halt Repsol’s drilling projects in the Ca Rong Do field, endangering the billion-dollar contract with the Malaysian firm (“Yinson JV ordered to halt ops for Vietnam job,” The Star Online, March 28, 2018,

InvestKL, a Malaysian state-owned investment promoter, said that it is on track to bring in 100 multinational companies by 2020. Last year the agency exceeded its target to attract 10 companies and notes that since 2011, nearly 11,000 jobs have been created as a result of FDI. The company’s Chief Executive Officer cites Kuala Lumpur’s Digital Free Trade Zone and the government’s goals of a 4th Industrial Revolution as major pulls for foreign companies despite attractive investment climates in other countries (Lidiana Rosli, “InvestKL on track to attract 100 MNCs by 2020,” New Straits Times Online, March 29, 2018,


The Vietnamese government has announced a list of sectors that would be prioritized to receive Japanese high-technology and investment. Hanoi’s 2020 investment strategy calls for more than USD $110 billion in investment over the next two years which Japanese companies have been eager to provide following the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Japan’s Daikin Industries is building a $100 million air-conditioning factory, Daiwaa-SSI is planning a pharmaceutical facility, and Nidec Corporation will soon receive government approval for a $400 million actuator plant (“Hanoi puts its hopes in Japanese FDI,” Vietnamnet Bridge, March 27, 2018,

In the wake of a state visit to France by Vietnam’s Communist Party General Secretary, new bilateral investment deals blossomed against the backdrop of the two countries finalizing various cooperation documents. French construction group Bouygues signed a USD $1.86 billion contract with Vietnam’s T&T Group to build and operate a metro line in the country’s capital city. In addition, French state affiliated utility company EDF joined a $1.8 billion consortium in charge of operating a gas fired power plant project in Vietnam (“New chapter opens in Vietnam-France relationship,” Nhan Dan Online, March 28, 2018,

*The information used herein is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content in this section does not necessarily represent the official view of the Wong MNC Center, its Board of Directors, or its Advisory Board.