MNCs in the News-2020-04-17

China

China’s Ministry of Commerce reported that nonfinancial sector foreign direct investment (FDI) plunged by 10.8 percent in the 1st quarter of 2020 versus the same period last year. The year-over-year (YOY) drop resulted largely from the effects of Covid-19. The “good news” is that the YOY decline witnessed in March was not as large as February’s, perhaps due to the Chinese government’s policy measures and the enduring attractions of the China market. Inward FDI also is expected in the medical products, pharmaceutical, and high-tech sectors (Zhong Nan, “Nonfinancial FDI in Q1 Down by 11%,” China Daily, April 16, 2020, www.chinadaily.com.cn/a/202004/16/WS5e97a72fa3105d50a3d16866.html)

A Shanghai court ordered Chinese shoe company New Barlun to pay USD $1.41 million “in damages and litigation costs for trademark infringement and unfair competition” to United States (US) shoe company New Balance. New Balance charged New Barlun’s logo was similar to its and that use of the infringing logo lowered its product ratings and impaired its goodwill. It had asked for an end to the unfair competition, the posting of public disclaimers, and almost 3 times as much in penalties (“Chinese Shoe Brand Ordered to Pay $1.41m to New Balance for Unfair Competition,” Global Times, April 16, 2020, https://www.globaltimes.cn/content/1185842.shtml)

In response to continuing criticism about Chinese telecommunication giant Huawei’s involvement in the United Kingdom (UK’s) 5G system as well as one UK parliamentarian’s tabling of a legislative amendment that would establish a time limit on Huawei’s involvement in the UK network, a Huawei executive rejected criticism, touted that his firm was keeping Britain online during the Covid-19 epidemic, and noted that disrupting Huawei’s role in 5G would hurt the UK itself. Of Huawei’s 90 or so commercial 5G contracts, 50 percent are in Europe (“Huawei Secures UK Telecom System, Warns Against Disrupting 5G,” Global Times, April 13, 2020, https://www.globaltimes.cn/content/1185503.shtml)

Due to fears about the loss of the UK’s technology base, a British parliamentarian has argued that the UK government “should seek every mechanism to prevent the removal of the technology base of Imagination Technologies to China.” In 2017, Imagination Technologies, a UK semiconductor chip designer, was purchased by Canyon Bridge, a Chinese venture fund previously based in the US, that is owned by China state-owned China Reform Holdings. The UK government recently blocked an attempted board coup by China Reform Holdings (Guy Faulconbridge, “UK Urged to Stop China Taking Control of Imagination Tech: Lawmaker,” Reuters, April 14, 2020, https://www.reuters.com/article/us-china-britain-imaginationtechnologies...)

Japan

Yahoo Japan Corp. will provide data on suspected coronavirus clusters to Japan’s Health Ministry to assist with efforts to prevent the spread of Covid-19. The company specifically will gather users’ location information, search, and purchase history to identify potential clusters. Responding to concerns about privacy, Yahoo Japan emphasized that it would only share post-analysis data from consenting users. The ministry also cooperates with messaging app provider Line Corp. to survey its users on their health conditions and possible interactions with infected patients (“Yahoo Japan to give health ministry data on potential coronavirus clusters,” The Japan Times, April 14, 2020, https://www.japantimes.co.jp/news/2020/04/14/business/corporate-business...)

The Board of Investment of Thailand recently has approved Japanese automaker Mitsubishi Motors Corp. electric and hybrid vehicle production project. The $167 million project entails the renovation of existing production lines at a plant in Laem Chabang Industrial Estate, southeast of Bangkok. Once production starts in 2023, the facility will produce 9,500 electric and 29,500 hybrid vehicles per year. The investment provides a boost for Thai economy as the Southeast Asian country struggles to reduce the economic impact of the coronavirus outbreak and recover from it (“Mitsubishi Motors wins Thai approval for eco-car project,” Mainichi Shimbun, April 14, 2020, https://mainichi.jp/english/articles/20200414/p2g/00m/0bu/066000c)

South Korea

US streaming giant Netflix and Korean internet broadband provider SK Broadband have been mired in a dispute since 2019 because the latter wants Netflix to pay special fees for using its network for data-heavy content. Netflix refused and responded with a technical solution involving a cache server. The two sides failed to resolve their conflict through Korea Communications Commission arbitration. Following this, Netflix filed a lawsuit with the Seoul Central District Court against SK Broadband over the latter’s network fee charges (Baek Byung-yeul, “Ahead of 5G boom, controversy reignited over network usage fees,” The Korea Times, April 16, 2020, https://www.koreatimes.co.kr/www/tech/2020/04/133_288017.html)

South Korean battery maker LG Chem reported Poland would exempt its employees from the two-week quarantine requirement, allowing the company to continue expanding its electric vehicle (EV) battery plant. LG Chem will send around 200 employees to Wroclaw, where the company plans to double its EV battery production capacity to 60GWh. Poland has closed its border until May 3, but the negative impact on European automakers due to disruptions in EV battery production led it to loosen restrictions for LG Chem (Kim Byung-wook, “Poland to bring back LG Chem technicians on special flight,” The Korea Herald, April 16, 2020, http://www.koreaherald.com/view.php?ud=20200416000739)

*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.