MNCs in the News-2020-03-20

China

China’s National Development and Reform Commission (NDRC) believes the coronavirus has not led and will not lead to any severe foreign direct investment (FDI) withdrawals. Logistics and staffing are returning to normal levels and China maintains its long-term attractions such as its large market and sectoral markets, and its comprehensive industrial chain. The NDRC also notes China will actively work to help foreign firms resume normal operations, “will continue to shorten the negative list…and [will] step up efforts in advancing major foreign-invested projects” (“Confidence of Foreign Firms in China Growing as Supply Chain Recovers,” China Daily, March 17, 2020, www.chinadaily.com.cn/a/202003/17/WS5e709b1ea31012821727fd34.html)

The Shanghai government highlights that, despite the coronavirus, foreign financial giants like BlackRock, Fidelity International, and JPMorgan continue to pour FDI into Shanghai, setting up majority-owned joint ventures (JVs) as well as wholly foreign owned enterprises (WFOEs). They are investing in the mutual fund, asset management and securities sectors, among other areas. This results from China’s liberalization of its financial sector, the terms of the United States (US)-China Phase I trade deal, signed in January this year, which requires China to open the sector, and market opportunities (“Shanghai Says Global Financial Giants Investing Despite Virus,” Reuters, March 20, 2020, https://www.reuters.com/article/us-china-finance/shanghai-says-global-fi...)

China’s state-owned enterprise (SOE) China State Construction Engineering Corporation is building twenty towers in the central business district (CBD) in Egypt’s new administrative capital in Cairo, one of which will be “the tallest skyscraper in Africa upon completion.” It just “finished the capping of the first skyscraper” in the CBD with the entire mega-project planned to be completed in 2022. According to Chinese reports, “the project is established under China’s Belt and Road Initiative that seeks common development through win-win partnerships among participating states” (“Chinese Firm Finishes Capping 1st Business Skyscraper in Egypt’s New Capital,” China.org.cn, March 16, 2020, www.china.org.cn/world/Off_the_Wire/2020-03/16/content_75817722.htm)

Japan

Japan’s Ministry of Finance started soliciting public comment on future revisions to the Foreign Exchange and Foreign Trade Act, which lowers the threshold for the prescreening of foreign investment in strategic sectors from 10 to 1 percent. Anticipated revisions might make foreign financial institutions eligible for a blanket exemption from pre-notification requirements, provided they satisfy several conditions regarding the transfer of business activities and access to technological information of the investee company. In contrast, general investors only will be eligible for exemptions designed for non-core sectors (“Japan Unveils New Foreign Investment Rules for Consultation,” Regulation Asia, March 17, 2020, https://www.regulationasia.com/japan-unveils-new-foreign-investment-rule...)

To contain the spread of the coronavirus, Nissan Motor Corp. and Toyota Motor Corp. announced that they would temporarily halt production at their plant in North America. Specifically, Toyota will close its automobile and component plants for two days while Nissan will suspend production until April 6. This move follows decisions by Honda and U.S. automobile manufacturers to shut down their plants until the end of March. The coronavirus pandemic has spread globally from China infecting thousands of people and disrupting global supply chains (“Toyota, Nissan join U.S. output halt due to coronavirus outbreak,” Mainichi Shimbun, March 19, 2020, https://mainichi.jp/english/articles/20200319/p2g/00m/0bu/098000c)

South Korea

Korea Rail Network Authority (KRNA) won a bid from Thailand to manage a high-speed railway linking Don Mueang International Airport, Suvarnabhumi Airport, and U-Tapao International Airport. The project, which is worth 8 trillion won and expected to be completed in 2023, is supervised by Thailand’s Eastern Economic Corridor Office (EECO), a government agency responsible for economic development projects. In conjunction with its duties, KRNA plans to send experts to participate in the project’s design stage (Jung Min-hee, “Korea Rail Network Authority Lands Order to Manage High-speed Railway in Thailand,” Business Korea, March 18, 2020, http://www.businesskorea.co.kr/news/articleView.html?idxno=42859)

Hyundai Rotem, a subsidiary of Korea’s Hyundai Motor Group, had to pay 120 million won in fines for not paying overtime wages to workers at its rolling stock plant in Araraquara, Brazil. According to worker complaints filed with local labor authorities, the firm failed to pay them overtime wages even though workers have been working 12-14 hours per day, including weekends and public holidays. After completing its investigation of the complaints, Brazil’s Ministry of Labor ordered Hyundai Rotem to pay the required wages (Jung Min-hee, “Hyundai Rotem Fined by Brazilian Government for Exploiting Workers,” Business Korea, March 13, 2020, http://www.businesskorea.co.kr/news/articleView.html?idxno=42697)

*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.