MNCs in the News-2019-06-14


At the annual Lujiazui Forum, People’s Bank of China (PBoC) Governor Yi Gang said that the PBoC “would support a pilot program based in Shanghai to remove the foreign ownership limit in firms providing securities and fund management services.” Over the past six months or so, Chinese financial regulators already have allowed foreign firms such as JPMorgan Chase, Nomura Holdings, and UBS Group to take majority stakes in joint ventures (JV) (Xie Yu, “China Mulls ‘End to Foreign Ownership Limits’ on Financial Firms, Signals Bold Effort to Remove Barriers in Reform Plan,” South China Morning Post, June 14, 2019,

China’s Ministry of Commerce (MOFCOM) released a report which showed that United States (US) foreign direct investment (FDI) in China experienced a growth rate of 7.5 percent for the January through May period year over year (YOY) versus the 24.3 percent witnessed for the January through April period YOY. Some see an association with the US-China trade war. China’s overall inward FDI (IFDI) grew 3.7 percent for the first five months of the year (Orange Wang, “Trade war could cause global recession, Beijing official warns, as US investment growth in China sinks,” South China Morning Post, June 13, 2019,

Recently, Chinese companies have been “speeding up efforts to build hydropower stations worldwide.” Sinohydro signed a contract to develop the Koukoutamba hydro project in Guinea and China Gezhouba Group concluded an agreement for the Nam Bayu Hydropower Station Project in Laos. The hydropower sector was one of the earliest areas where Chinese companies went abroad and one project due online in 2021, the Karot project in Pakistan involving Three Gorges Corp., is the first overseas hydropower project using Chinese technology and standards (Zheng Xin, “Hydropower sector no longer a novice but a global leader,” China Daily, June 10, 2019,

In upcoming weeks, Shanghai will launch a technology board, with flexible IPO pricing and listing policies. It offers opportunities for Chinese firms generally, but also Chinese firms specifically facing limits buying US assets for sale, tapping US capital markets, and accessing US supply chains. It also should be a way to support more indigenous innovation. Those traded on the board also may find themselves awash in opportunities for national and local subsidies and other preferential policies and thus eagerly eye the new board (“China’s New Trade War Defense is a Stock Market for Tech Firms,” Bloomberg, June 10, 2019,


Tokyo Electron, a Japanese company and the world’s third largest supply of semiconductor manufacturing equipment, “will not supply to Chinese clients blacklisted by Washington.” A company executive stated that “‘It’s crucial for us that the U.S. government and industry see us as a fair company.’” Per one analysis, the statement demonstrates how Washington’s initiative to block sales of technology to Chinese business even is affecting non-American firms with no obligation to follow American law (Makiko Yamazaki, “Exclusive: Top Japanese chip gear firm to honor U.S. blacklist of Chinese firms – executive,” Reuters, June 11, 2019,

Inpex, a major Japanese oil and gas company, is ready to agree in principle with Indonesia to build a USD $18.4 billion liquefied natural gas (LNG) plant in Indonesia that will go online in the late 2020s. The initial plan was to build a lower-cost offshore plant, but Indonesia decided in 2016 that the project would be changed to an onshore plant. Before the project can move to the construction stage, Inpex and Jakarta have to agree on project size and other details (“Japan’s Inpex to build $18bn onshore LNG project in Indonesia,” Nikkei Asian Review, June 14, 2019,

South Korea

In mid-June, Renault Samsung Motors union workers were supposed to go on an all-out strike. However, the labor union canceled the strike because a “majority of members refused to participate.” The workers rejected the strike because they felt it would reduce work and lead Renault to build more cars outside of South Korea. The union also seemed motivated to cancel the strike because of the company’s threat to file a damage suit against the union to recover strike-related losses (Jung Min-Hee, “Labor and Management of Renault Samsung Motors Reach Tentative Agreement on Wage Hike,” Business Korea, June 13, 2019,

Korea electric vehicle (EV) battery makers have had a difficult time in China because they have not been eligible for government subsidies. However, Korean firms such as LG Chem now see an opening because the Chinese government is planning to end all subsides for EV manufacturers by 2020. Thus, they have been preparing for the future through FDI, plant expansions, and JVs. Regarding JVs, LG Chem recently formed a 50-50 JV with China’s Geely to build a $94 million battery manufacturing plant (Baek Byung-Yuel, “LG Chem Forges EV Battery Venture with China’s Geely,” The Korea Times, June 13, 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.