MNCs in the News-2018-09-21

China

At the World Artificial Intelligence Conference, Chinese Vice Premier Liu He, Alibaba’s Jack Ma, and Google executives championed a “borderless approach to AI research.” This was a stark contrast to China State Council’s call in 2017 that China “become the world leader in AI by 2030, in part through government support.” For some observers, China’s softer stance had to do with the realities of China’s reliance on others’ technology. Foreign companies like Amazon and Microsoft used the event to tout their contributions to China’s AI development (“China Calls for Borderless Research to Promote AI Development,” Bloomberg, September 17, 2018, https://www.bloomberg.com/news/articles/2018-09-17/china-calls-for-borde...)

According to analysts and attendees at the 2018 Summer Davos, the Greater Bay Area, China’s term for a mega-regional initiative involving the integration of the Guangdong-Hong Kong-Macao, the region “has been attracting more overseas firms with its huge growth potential.” The region, which had a GDP of USD $1.5 trillion as of 2017 and offers numerous clusters in high-tech, traditional manufacturing, and renewable energy as well as favorable investment policies, is to be more tightly knit together through infrastructure such as the Hong Kong-Zhuhai-Macao Bridge complex (“Greater Bay Area to Attract More Foreign Investment,” Global Times, September 18, 2018, http://www.globaltimes.cn/content/1120084.shtml)

In 2017 in a meeting with United States (US) President Donald Trump prior to the latter’s inauguration, Alibaba’s Jack Ma promised to create 1 million jobs in the US. He recently retreated from the promise saying Sino-American tensions undermined the premise upon which his promise had been based. Many were skeptical early on about Alibaba’s promise since it did not involve direct job creation, but jobs that supposedly would flow from allowing US actors to sell goods on Alibaba (Jillian D’Onfro, “Alibaba’s Jack Ma Backs Down from Promise to Trump to Bring 1 Million Jobs to the US,” CNBC, https://www.cnbc.com/2018/09/19/jack-ma-alibaba-is-no-longer-planning-to...)

Germany is moving to craft various measures “to counter a surge in Chinese bids for stakes in Germany technology companies.” One step would entail the establishment of a billion euro fund that could save companies in financial trouble and thus make it unnecessary to find outside investors. Another measure would enhance investment review processes to cover smaller Chinese FDI stakes and FDI in more diverse sectors. China did 30 acquisitions in 2017, which was double the number in 2016 (“Germany Considers Billion Euro Fund to Stop China Buying Up Vital Tech Firms,” South China Morning Post, September 19, 2018, https://www.scmp.com/news/china/diplomacy/article/2164895/germany-consid...)

Japan

Encouraged by the opening created by Chinese rivals’ struggles to meet Beijing’s stricter environmental regulations which has caused the former to cut or halt production, Japanese glass manufacturing company AGC joins others like Mitsubishi Chemical in ramping up Southeast Asian production. Specifically, AGC plans to invest about $889 million to increase regional output of caustic soda and polyvinyl chloride. The spending will start at a plant operated by Thai subsidiary Vinythai, but AGC also has plans to grow in Indonesia (Yuji Nitta, “AGC invests $890m in Southeast Asia as inflow from China slows,” Nikkei Asian Review, September 21, 2018, https://asia.nikkei.com/Business/Companies/AGC-invests-890m-in-Southeast...)

Japanese tech-hungry firms are being matched with startups in India to obtain innovations that would allow for the revitalization of Japan’s aging population and mature industrialized economy. Following last year’s joint declaration by the two countries’ leaders, many Japanese venture capital funds have been actively investing in Indian startups. Softbank Group Corp. for example, has already announced a plan to invest $10 billion in the Indian market by 2024. Lacking in well-trained IT professionals, “India is the ideal partner” for Japanese companies seeking innovation (“Japan’s tech-hungry firms seeking help from Indian IT startups,” The Japan Times, September 20, 2018, https://www.japantimes.co.jp/news/2018/09/20/business/japans-tech-hungry...)

South Korea

South and North Korea agreed to take steps this year to reconnect cross-border railways and roads and resume discontinued inter-Korean projects like the Gaeseong Industrial Complex in the name of “achieving balanced economic growth and co-prosperity.” The two sides have also agreed to discuss establishing joint economic and tourism zones along the western and eastern coasts of the Peninsula. Hyundai Group, which holds exclusive licenses for seven infrastructure projects in the North, is expected to resume them once the sanctions are lifted (Baek Byung-yeul, “Two Koreas agree to build cross-border railways, highways construction,” The Korea Times, September 19, 2018, http://www.koreatimes.co.kr/www/tech/2018/09/693_255828.html)

South Korea’s Hyundai Engineering signed Memoranda of Understanding with Indonesian officials regarding the expansion of its industrial facilities and the construction of a hydroelectric power plant there. The industrial facilities are managed by Indonesian petrochemical company Pt. Sulfindo Adiusaha while the hydroelectric power plant will be built in cooperation with the Indonesian energy company Terregra Asia Energy. Since 2014, Indonesian President Joko Widodo has placed increasing electricity generation facilities as a high priority because his country aims to produce 35 gigawatts of electricity by 2026 (Kim Bo-gyung, “Hyundai Engineering bolsters business in Indonesia,” The Korea Herald, September 19, 2018, http://www.koreaherald.com/view.php?ud=20180919000651)

*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.