MNCs in the News-2019-06-28

China

American companies investing in China have long had to deal with forced technology transfers and intellectual property rights (IPR) infringements. As part of its trade negotiations with China, the United States (US) has been demanding China end its theft of American intellectual property. President Donald Trump’s tough stance on the issue seems to be making China more respectful of IPR when dealing with foreign technology (Jodi Xu Klein, “Protecting IP in China is hard, but awareness is rising, thanks to Donald Trump,” South China Morning Post, June 28, 2019, https://www.scmp.com/news/china/article/3016378/protecting-ip-china-hard...)

At the Osaka G20 Summit, Chinese President Xi Jinping proposed several measures that China will implement to open its market further. Specifically, China will soon release an updated negative investment list for 2019 and will further open up its agriculture, mining, manufacturing and service sectors, removing all restrictions for foreign investment in sectors not included on the negative list. Next year, Beijing will introduce a penalty system for IPR violations and a complaint system for foreign businesses registered in China (“Xi Names Sectors to Further Open to Foreign Investment,” Caixin Global, June 28, 2019, https://www.caixinglobal.com/2019-06-28/xi-names-sectors-to-further-open...)

On Thursday, the Belt and Road Economic Information Partnership (BREIP) was established in Beijing. The president of the Xinhua News Agency said that the BREIP aims to provide “practical economic information service for the governments and enterprises of countries participating in the Belt and Road Initiative (BRI) construction through sharing economic information among members, so as to promote mutual benefit and win-win for all participants.” BREIP member institutions will be able to share information regarding BRI-related investment, projects and firms via a technological platform (Yi Yang, “Belt and Road Economic Information Partnership established in Beijing,” Xinhua, June 27, 2019, http://www.xinhuanet.com/english/2019-06/27/c_138178569.htm)

Two important Chinese BRI projects in Africa have come to a halt. Tanzania suspended a USD $10 billion port project in Bagamoyo while Kenya halted construction on a $2 billion coal power plant. As for Bagamoyo, Tanzania’s President said that Chinese terms for the port were “exploitative and awkward.” As for the Kenyan power plant, judges ruled the coal power plant’s environmental assessment was inadequate given the plant would have increased Kenya's greenhouse gas emissions 700 percent (Sophia Yan, “China's ambition dealt blow ahead of G20 as Tanzania and Kenya projects grind to halt,” The Telegraph, June 27, 2019, https://www.telegraph.co.uk/news/2019/06/27/tanzania-suspends-10-billion...)

Japan

At the Osaka G20 summit, participating countries, including China, adopted Japan’s international principles for quality infrastructure which, among other things, stress the importance of debt sustainability and transparency and openness in procurement. Some opined this was a blow to China’s BRI (associated with irresponsible lending and problematic procurement practices), but others noted China’s offerings better fit the needs of some developing countries. Still, the principles may put China under increased scrutiny and force it to change some practices (Tomohiro Osaki, “In blow to China, Japan's ‘quality infrastructure’ to get endorsement at Osaka G20,” The Japan Times, June 25, 2019, https://www.japantimes.co.jp/news/2019/06/25/business/economy-business/b...)

At the G20 summit in Osaka, Japanese Foreign Minister Taro Kono remarked to Boris Johnson and Jeremy Hunt, two leading candidates to become United Kingdom (UK) Prime Minister that are willing to accept no deal Brexit, that “‘Japan wouldn’t want a no-deal Brexit.’” In answer to a question posed by the BBC, Kono noted that some Japanese companies were beginning moving to other places in Europe and stated that it was possible that “‘there is going to be less [Japanese] investment’” (“No-Deal Brexit Could End Japan Investment Boom, Envoy Tells U.K. Leadership Candidates,” The Japan Times, June 28, 2019, https://www.japantimes.co.jp/news/2019/06/28/business/no-deal-brexit-end...)

South Korea

Saudi Aramco and its affiliates have signed 12 accords with South Korean companies covering numerous areas like shipbuilding, engine manufacturing, refining, petrochemicals, and crude oil storage. “The agreements are part of Saudi Aramco’s long-term downstream growth and diversification strategy.” One major deal is a joint venture (JV) involving Saudi Aramco, Hyundai Heavy Industries (HHI), and the Saudi Arabian Industrial Investments Company for an engine manufacturing and after-sales facility in Saudi Arabia. Another increases HHI’s equity share in International Maritime Industries (Jung Min-Hee, “Saudi Aramco Signs 12 Agreements with South Korean Partners Worth Billions of Dollars,” BusinessKorea, June 26, 2019, http://www.businesskorea.co.kr/news/articleView.html?idxno=33292)

Recently, a consortium involving Korea Hydro & Nuclear Power (KNHP) and KEPCO Plant Service & Engineering (KPS) signed a five-year maintenance service deal with Nawah Energy Company for the Barakah nuclear power plant in the United Arab Emirates. The contract does not involve maintenance services, nuclear scientists, and engineers, meaning that the amount of the contract is far less than originally envisioned. Some blame South Korea’s President, saying his antinuclear campaign prevented KNHP and KPS from winning a bigger deal (Kwak Yeon-Soo, “Korea fails to secure long-term maintenance order for UAE nuclear plant,” The Korea Times, June 24, 2019, www.koreatimes.co.kr/www/tech/2019/07/515_271169.html)

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.