MNCs in the News-2018-04-20


China’s National Development and Reform Commission (NDRC) has announced that “China is making new negative lists to expand market access for foreign investors” that will be promulgated in the first half of 2018. Apparently, there will be two versions, one for free-trade zones (FTZs) and the other for other parts of China. The FTZ versions will be incorporate “bolder opening-up policies.” Openings putatively will be seen not only for the financial and auto sectors, but also energy, infrastructure, logistics, professional services, and transportation sectors (“China to Roll Out New Negative Lists for Foreign Investors,” China Daily, April 17, 2018,

Various foreign companies in China like Japan’s Honda and the United States’ Cummins have been working to accommodate the Chinese Communist Party (CCP)’s desire to obtain a bigger say in the former’s day-to-day operations and strategic decisions. Not surprisingly, Chinese state-owned enterprises (SOEs), even those publicly traded such as Sinopec and the Industrial and Commercial Bank of China, have been at the forefront of accommodating the CCP’s requests. Foreign business associations have expressed concerns, but it remains unclear what they can accomplish (Alexandra Stevenson, “China’s Communists Rewrite the Rules for Foreign Businesses,” The New York Times, April 13, 2018,

China’s Ministry of Commerce (MOFCOM) released information online indicating China’s non-financial outbound direct investment (OFDI) rose 24.1 percent for the first quarter of 2018 year-over-year (YOY). The 24.1 percent increase entailed USD $25.5 billion of Chinese OFDI in 2,023 foreign enterprises in 140 economies. MOFCOM touted most COFDI flowed into leasing, mining, manufacturing, and information technology and that there were “no new investments in [irrational areas] like property, sports, and entertainment.” Reportedly, Belt and Road Initiative (BRI) COFDI surged 22.4 percent YOY (Jing Shuiyu, “Irrational Buying Controls See ODI Increase by 24.1% in Q1,” China Daily, April 18, 2018,

Chinese investors are pouring large amounts into American biotechnology firms. The reasons are diverse, but there seems to be interest in obtaining technologies earlier which allows for high-returns, facilitating the development of China’s biotechnology sector (which is part of “Made in China 2025”), and easing China’s, which is the world’s second largest drug market, access to pharmaceutical products. Soaring COFDI in biotech, which ran $1.4 billion in the 1st quarter of 2018, is boosting the valuations of many US companies (Rebeca Spalding and Emma Ockerman, “Chinese Money Floods U.S. Biotech as Beijing Chases New Cures,” Bloomberg, April 19, 2018,


In order to fund its USD $4.5 billion railway project across Java Island from Jakarta to Surabaya, Indonesia will rely on loans from the Japanese government and public-private partnership schemes. Involving the private sector in the project is driven by the country’s strict limits on its budget deficit and concerns about increasing foreign debt. Indonesia will also seek to partner with Japan on an access building road project in West Java and toll road-building project in Sumatra (Jun Suzuki and Wataru Suzuki, “Indonesia to use Japan loans and private capital for $4.5bn railway,” Nikkei Asian Review, April 20, 2018,

Japanese automaker Honda Motor was questioned by Chinese authorities and ordered a recall of the CR-V after owners complained about gasoline smells in the cabin on the Chinese Twitter, Sina Weibo. Chinese authorities rejected Honda’s recall plan for reasons that remain “unclear.” However, without approval of the recall plan Honda cannot sell the model. Thus it suspended sales early March. Honda is re-examining its CR-V designs but until the problem is under control, it is expected Honda’s Chinese sales will continue to drop (Yu Nakamura, “Suspension of CR-V sales hits Honda in China,” Nikkei Asian Review, April 18, 2018,

South Korea

South Korea’s government offered to give American carmaker General Motors (GM) USD $470 million to continue its Korean operations. State-operated Korean Development Bank will only offer financial assistance if GM does not file for bankruptcy protection. GM opened last minute negotiations with its workers union to cut another USD $100 million in costs, but failed to reach a resolution. Reuters reports GM will likely seek bankruptcy protection (Song Jung-a, “S Korea offers GM $470m to stay in country as bankruptcy looms,” Financial Times, April 20, 2018,; “GM Korea, union fail to reach wage deal,” Reuters, April 20, 2018,

Multinationals operating in South Korea facing increasingly government scrutiny for malpractice. For example, US-based Apple will face a fine of nearly USD $100 million from Korea’s Fair Trade Commission for forcing local telecoms to shoulder unwarranted costs. Furthermore, the Korean antitrust competition commission is investigating Google for anti-competitive practices while the Korea Communications Commission will investigate Google and Facebook for avoiding network taxes. Seoul also is moving to force foreign limited liability companies to disclose financial information and undergo external audits (Shin Ji-hye, “Multinational firms accused of ‘gapjil,’” The Korea Herald, April 19, 2018,


Following a meeting between the Asian Infrastructure Investment Bank’s (AIIB) President and Malaysia’s Prime Minister, the China-led AIIB expressed interest in financing infrastructure projects throughout the country. Malaysia is looking for AIIB funding in a variety of industries and is not limiting investment to projects based on China’s BRI. Second Secretary of China’s Malaysian Embassy stressed Chinese FDI generated economic growth and welfare benefits, the latter flowing from Chinese companies hiring large percentages of locals for Malaysia-based projects (“Beijing-based AIIB keen to finance huge infrastructure projects in Malaysia,” The Star Online, April 19, 2018,

Japan’s Nichirei Corp acquired a 40 percent stake in Malaysia’s state-owned Cold Chain Network (CCN), which provides logistics services to multinational and domestic companies. The partnership will leverage Nichirei’s experience and business network with CCN’s domestic operations. Investment by Nichirei Corp will allow CCN to pursue Kuala Lumpur’s Northern Corridor Economic Region development plan and its Iskandar Malaysia economic corridor. The two government initiatives target Malaysia’s northern and southern provinces, allowing CCN to have Trans-Asian cross-border logistics (“CCN announces investment by Japan’s Nicherei,” New Straits Times, April 17, 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.