MNCs in the News-2019-01-18


The latest report of China’s Ministry of Commerce (MOFCOM) showed 885.61 billion yuan in foreign direct investment (FDI) into mainland China in 2018, a 0.9 percent rise compared to the previous year. The establishment of foreign-funded firms rose 69.8 percent in 2018 compared to 2017, with 60,533 new companies founded last year. 2018 also saw an increase in FDI flows in the manufacturing sector, 20.1 percent more than in 2017. China is taking measures to reduce restrictions and remove difficulties facing inward FDI (IFDI) (Jing Shuiyu, “FDI on Chinese mainland rises: Ministry of Commerce,” China Daily, January 14, 2019,

United States (US) automakers appear to be growing positive about opportunities in the Chinese market as the trade war between the US and China seems to be heading into a new, calmer phase. As for European firms, Volkswagen CEO Herbert Diess said he believes that “improved relations between the world's two largest economies will benefit not only both countries, but the global economy” while Fiat Chrysler Automobiles CEO Mike Manley said that he is happy “discussions are going to start up again and we’ll see what happens there” (“U.S. automakers see great opportunities in China,” Xinhua, January 16, 2019,

In its 2019 global M&A outlook report, JPMorgan Chase & Co said that despite the economic slowdown and geopolitical uncertainty, companies in China will continue to look for overseas mergers and acquisitions (M&As), partly because readily-available capital gives Chinese firms strong purchasing power. Chinese companies will mostly look for deals that will grant them access to famous brands, technology, distribution networks, and natural resources. Since China is loosening restrictions on IFDI, M&A deals in China may increase (Manuel Baigorri, “China, Japan Overseas M&A Push to Extend in 2019, JPMorgan Says,” Bloomberg, January 16, 2019,

Overseas investments are now riskier for Chinese companies because of growing tensions with the US and threats posed by terrorist groups such as al-Qaeda. More specifically, a report published by Paitron Services and the China Overseas Development Association observed the US is increasing its efforts to counter China’s growing influence abroad and that Chinese investments are particularly at risk in Asia and Africa, where Beijing is trying to develop the Belt and Road Initiative (Laura Zhou, “Overseas investments riskier for Chinese firms as US tensions and Islamic State threats rise,” South China Morning Post, January 15, 2019,

During a recent visit to Israel, US Deputy Secretary of Energy Dan Brouillette warned the country that if Jerusalem does not implement tougher screening of Chinese investments, intelligence sharing between the two allies could be at risk. The US is particularly worried about Chinese firms Huawei and ZTE, as it believes the two network equipment makers pose spying threats. After the meeting with Brouillette, Israeli Energy Minister Yuval Steinitz said that the US official had “raised concerns about the issue of foreign investments in the State of Israel” (“U.S. official cautions Israel over Chinese investments,” Reuters, January 16, 2019,


Japan’s Hitachi Ltd. board decided to suspend plans to build two nuclear reactors in the United Kingdom (UK) after encountering difficulties securing investors to finance the massive USD $27.5 billion project. Despite the Japanese government’s efforts to promote the export of nuclear technology, Hitachi and Hitachi’s Japanese rivals like Toshiba and Mitsubishi Heavy Industries are all facing financial difficulties involving huge losses and ballooning safety-related costs abroad. Hitachi denied that the political turmoil flowing from Brexit had any effect on the decision (“Hitachi decides to halt U.K. nuclear project due to investment shortfall,” The Japan Times, January 17, 2019,

A Japanese government panel released corporate governance reform proposals requiring both listed and unlisted larger corporations to have outside directors. With 2020 set as the target year for implementation, these proposals are aimed at improving board diversity and transparency and boosting profitability and competitive power. However, outside directors are not a panacea. The presence of outside directors failed to prevent cases like Nissan’s former Chairman Carlos Ghosn allegedly understating his pay or Toshiba’s colossal losses suffered from its US nuclear operations (Hiona Shiraiwa, “Japan crafts governance reforms, with 2020 set as target year,” Nikkei Asian Review, January 17, 2019,

South Korea

The South Korean industry minister vowed to “expand ties with the United Arab Emirates in the energy segment and seek new opportunities based on their cooperation in the Barakah nuclear plant project” after meeting with the chairman of the Executive Affairs Authority of Abu Dhabi. The minister asked the authority to focus on South Korean companies currently bidding for a long-term maintenance agreement for the plant while the UAE asked South Korea to play a wider role in the UAE’s energy projects (“Industry minister vows to expand ties with UAE in energy segment,” The Korea Herald, January 15, 2019,

The Seoul High Court upheld a ruling that ordered Japanese machinery maker Nachi-Fujikoshi Corp. to pay $71,300 to $89,000 to 27 Koreans forced into wartime labor during World War II. Fujikoshi was accused of deceiving 1000 Korean girls into volunteering at munitions factories promising high future earnings. The victims lost the case in Japan in 2003 and brought the case back home after a Japanese court held “all reparation issues regarding the colonial period was settled in a 1965 treaty signed by Seoul and Tokyo” (“Appeals court upholds Fujikoshi labor victims’ compensation claims,” The Korea Times, January 18, 2019,

*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.