MNCs in the News-2020-02-28

China

An American Chamber of Commerce in China flash survey of membership showed the coronavirus has significantly disrupted the activities of its members, with respondents (N=150) indicating major adverse revenue impacts if normal operations do not resume by April 30. Of note, “49 percent of respondents hope China will provide tax alleviation; more than one-third are seeking clear, consistent policies, while 35 percent ask that transparency be prioritized.” Aside from this, “44 percent say epidemic-related uncertainty has negatively impacted their outlook regarding the [United States] (US)-China bilateral relationship” (“Flash Survey Results on COVID-19 Impact Revealed,” AmCham China, February 27, 2020, https://www.amchamchina.org/news/US-companies-significant-negative-busin...)

A joint European Union (EU) Chamber of Commerce in China and German Chamber of Commerce in China survey revealed European businesses in China have been severely affected by the coronavirus epidemic. Per survey respondents (N=577), “major challenges include unpredictable rules, highly restrictive quarantine demands and extensive pre-conditions to restart operations.” Beyond this, “half of respondents face inconsistent rules applied across different jurisdictions and at different levels of government, which can frequently change” (“COVID-19 Severely Impacting Business: Trade Associations Call for Proportionate Measures to Get Real Economy Back on Track,” European Union Chamber of Commerce in China, February 27, 2020, https://www.europeanchamber.com.cn/en/press-releases/3161/covid_19_sever...)

At a news conference, Huawei chairman Liang Hua stated his firm would build its first European manufacturing plant (Huawei’s second manufacturing facility overseas), a mobile base station plant in France worth about USD $217 million. Liang stated that the investment was “‘not a charm offensive.’” Yet, in the background, France’s top mobile operators has opted to work with Nokia and Ericsson and sources indicate Huawei worries about being banned by France’s cybersecurity agency, which must review all telecommunications equipment vendors (“Huawei to Build first European 5G Factory in France to Soothe Western Nerves,” The Japan Times, February 28, 2020, https://www.japantimes.co.jp/news/2020/02/28/business/huawei-build-first...)

In the wake of US Senator Charles Schumer writing to the head of the US Transportation Security Administration (TSA), TSA “has asked its employees to stop using [China’s] TikTok “to create public content and promotional material for the agency.” In his letter to the TSA, Schumer pointed out the US Department of Homeland Security had a rule “prohibiting the use of [TikTok] on government-issued devices due to national security concerns.” Some see TikTok, an extremely popular app, “as a potential national security threat” (Ding Yi, “U.S. Transport Agency Bans Employees from Using TikTok for Work,” Caixin, February 25, 2020, https://www.caixinglobal.com/2020-02-25/us-transport-agency-bans-employe...)

Japan

Facing criticism from the financial sector, the Japanese government is reportedly planning to further loosen restrictions in its new Foreign Exchange and Foreign Trade Act. Previously, investors seeking to buy more than 1 percent of shares in companies in sensitive industries are required to report to the authority in advance, even though asset managers and hedge funds might be exempt from the rule. However, the restriction might be loosened further to cover family-run funds, university endowments, and corporate pension funds (Min Jeong Lee & Emi Urabe, “Japan to Expand Exemptions to Tighter Foreign Investment Rules,” Bloomberg, February 25, 2020, https://www.bloomberg.com/news/articles/2020-02-25/japan-to-expand-exemp...)

Nissan Motor Co. has warned about the future of its Western European factories with one plant in Britain threatened by Brexit and another in Spain experiencing falling sales volumes. If Britain fails to strike a free trade agreement with the EU soon, this could threaten not only the viability of its UK plant, but also Nissan’s business strategy in Europe because of the 10 percent tariff the latter imposes on cars. Nissan also will have to cut Spanish jobs due to slumping demand (“Nissan warns about future of European plants as Brexit weighs,” The Japan Times, February 25, 2020, https://www.japantimes.co.jp/news/2020/02/25/business/nissan-warns-futur...)

Korea

Despite a major push by the South Korean government in 2013 as reflected by the “Act on Assistance to Korean Off-Shore Enterprises in Repatriation,” very few Korean companies moved back to Korea between then and the end of 2019 and those that did were small and in low-value sectors. To spur better results and obtain the production and jobs associated with large firms, Seoul “is revising laws and increasing incentives to ensure that more large South Korean companies return to their home country” (Jung Suk-Yee, “South Korean Government Encouraging Large Companies to Return to Korea,” BusinessKorea, February 27, 2020, http://www.businesskorea.co.kr/news/articleView.html?idxno=41946)

*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.