MNCs in the News-2020-03-27

China

The China Council for the Promotion of International Trade (CCPIT) has issued more than 6400 force majeure certificates which “help companies avoid penalties for not being able to meet contractual obligation.” More specifically, certificates allow businesses to delay completing orders without legal consequences, with the potential for unfilled orders to be fulfilled later if their customers agree. The CCPIT has issued them because of the fallout of the coronavirus epidemic led to worker shortages and production obstacles that prevented companies from meeting their obligations (“China issues over 6,400 force majeure slips to virus-hit companies,” China Daily, March 26, 2020, www.chinadaily.com.cn/a/202003/26/WS5e7c6953a31012821728244f.html)

China’s Ministry of Commerce (MOFCOM) recently released data on Chinese outward foreign direct investment (FDI) for the first two months of 2020. Per MOFCOM data, outward FDI (OFDI), which totaled USD $15.5 billion, grew 1.8 percent year-over-year (YOY). Chinese OFDI went into 1,733 businesses in 147 countries and regions and continued to diversify, flowing primarily into areas like leasing and commercial services, wholesale and retail, and manufacturing and mining. The leasing and commercial services sector showed the fastest growth, increasing 43.2 percent YOY (Zhong Nan, “China’s Outbound Investment up 1.8% in First Two Months,” China Daily, March 26, 2020, www.chinadaily.com.cn/a/202003/26/WS5e7c6071a310128217282423.html)

In its report on Chinese OFDI, MOFCOM further noted that during the first two months of 2020, Chinese companies made $2.72 billion in “new investments in 48 countries along the Belt and Road.” This figure represents an 18.3 percent jump YOY. Beyond this, newly signed contracted projects in 59 countries along the Belt and Road totaled $15.36 billion, an increase of 25.6 percent YOY. Total turnover for the period was $9.14 billion (“Chinese enterprises invest more in BRI Countries,” China Daily, March 26, 2020, www.chinadaily.com.cn/a/202003/26/WS5e7c661aa310128217282437.html)

With the spread of the coronavirus, the ability to quickly build hospitals has proven quite valuable. In the Republic of Trinidad and Tobago, Angola, and other countries, Chinese construction companies, with experience in China, have quickly built large-scale hospitals. In Trinidad and Tobago, China Railway Construction Corporation (CRCC) built one of the country’s “biggest and most advanced hospitals” in under two weeks. According to a CRCC expert, the company stands ready to build hospitals rapidly in India which recently instituted a 21-day lockdown (“China Construction companies build emergency hospitals overseas to help combat coronavirus,” Global Times, March 25, 2020, https://www.globaltimes.cn/content/1183693.shtml)

Japan

Japan’s Mitsubishi will deliver air radar systems to the Philippines as part of a $90 million package. The deal has special significance because it is “the first defense product export from Japan, excluding parts, since its long-held arms trade ban was eased in 2014.” The ability to export defense goods will be a boost to Japanese multinational corporations, which, nevertheless will be subject to various restrictions such as prohibitions against selling defense gear to countries “involved in conflicts” (“Mitsubishi Electric to Export Radar to Philippines in First Defense Package Deal since Ban Lifted,” The Japan Times, March 27, 2020, https://www.japantimes.co.jp/news/2020/03/27/national/mitsubishi-electri...)

At a time when the US Donald Trump administration is pressuring automobile companies to step up their contribution to the fight against Covid-19, Toyota Motor Corp. announced it would start mass production of face shields and face masks to supply hospitals near its plants. It was also finalizing deals with medical device makers to boost production of breathing ventilators and respirator hoods. Toyota Motor North America’s CEO said the company is eager to contribute its expertise and know-how to the fight against coronavirus (Chester Dawson, “Toyota Shifts Factories to Face Shields, Will Help Device Makers,” Bloomberg, March 27, 2020, https://www.bloomberg.com/news/articles/2020-03-27/toyota-shifts-factori...)

South Korea

After securing an exemption from Vietnam’s mandatory two-week quarantine policy for foreign visitors, affiliates of Samsung Electronics and LG Electronics will send 430 engineers to Vietnam on a chartered flight. Samsung engineers are tasked with the job of bolstering Samsung’s production capacity of organic light-emitting diode module while LG employees will support the production of smartphones, home appliances, and automotive parts. Hanoi suspended visa-free travel for Korean and stopped issuing work visas since February 29 to prevent the spread of the coronavirus (Song Su-hyun, “Samsung, LG to send engineers to Vietnam upon govt. permission,” Korea Herald, March 24, 2020, http://www.koreaherald.com/view.php?ud=20200324000708&np=3&mp=1)

The US International Trade Commission (ITC) released a public document on its default judgment against SK Innovation in the trade secret lawsuit filed by LG Chem. It argued SK Innovation sought to acquire trade secrets of LG Chem through interviews and hiring its former employees. SK Innovation also sought to destroy evidence, thus undermining LG Chem’s legal position and hampering judges’ ability to issue a fair ruling. The judgment will be considered as a legal framework for similar cases (Michael Hehr, “U.S. ITC Sides with LG Chem in EV Battery Trade Secret Infringement Case,” Business Korea, March 23, 2020, http://www.businesskorea.co.kr/news/articleView.html?idxno=43076)

*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.