MNCs in the News-2020-04-24

China

More than 1,000 companies have registered for the November 2020 3rd China International Import Expo (CIIE), which will have a special section devoted to public health and disease prevention. Many registrants are foreign companies, with the bulk having links to Germany, Japan, and the United States (US). These companies hope to showcase their products. One China Ministry of Commerce (MOFCOM) interviewee opines the CIIE also will be a venue for foreign firms to access the China market and manufacturing sector (Xie Jun and Ma Jingjing, “US Firms Sign Up for China’s 3rd Import Expo,” Global Times, April 20, 2020, https://www.globaltimes.cn/content/1186215.shtml)

MOFCOM recently reported China’s non-financial outward foreign direct investment (FDI) dropped to USD $24.22 billion for the 1st quarter of 2020, representing a less than 1 percent decline year-over-year and reflecting OFDI into more than 2500 businesses. This total consisted of $4.2 billion of FDI flowing into Belt and Road economies, which actually represented a significant increase YOY. According to MOFCOM, the structure of outward FDI (OFDI) was quite good with most OFDI going into sectors like leasing and business services and wholesale and retail (Zhong Nan, “China’s ODI Sees Small Dip in Q1,” China Daily, April 21, 2020, http://www.chinadaily.com.cn/a/202004/21/WS5e9eb395a3105d50a3d17c5e.html)

India’s trade ministry recently issued a notification that the government would have to approve FDI from countries sharing a land border with India with a senior government official stating, “‘these times should not be used by other countries to take over our companies.’” The notice did not specifically identify China, but was seen as aimed at it, though some observers saw no impact on greenfield investment. According to one source, Chinese FDI in India currently totals around $6.2 billion (Aditya Kalra and Aftab Ahmed, “India Toughens Rules on Investments from Neighbours, Seen Aimed at China,” Reuters, April 18, 2020, https://www.reuters.com/article/us-health-coronavirus-india-investments/...)

Canyon Bridge’s (a Chinese private equity firm) investment in the United Kingdom (UK)’s Imagination Technologies, a semiconductor chip designer, has been mired in controversy due to a recently attempted (eventually thwarted) board coup. Canyon Bridge has told the British government during a meeting between Culture Ministry officials, Imagination Technology representatives, and Canyon Bridge owners it would keep the firm’s headquarters in the UK. Canyon also said it would maintain “dialogue with the Secretary of State as we further build out our senior management team” (“Imaginational Tech Owner Tells UK the Company will Remain in Britain,” Reuters, April 18, 2020, https://www.reuters.com/article/us-china-britain-imaginationtechnologies...)

Japan

Japan plans to incorporate the medical sector into the list of industries with significant national security import, allowing Tokyo to limit foreign investment in this sector. This plan would amend the revised Foreign Exchange and Foreign Trade Control Law, which requires investors to report foreign investment in relevant areas if their stakes exceed 1 percent. As far as the medical sector is concerned, the list will include producers of medical equipment like ventilators, artificial lungs, and dialyzers, and businesses manufacturing pharmaceutical ingredients (“Japan to include medical sector in stricter curbs on foreign investment,” The Japan Times, April 23, 2020, https://www.japantimes.co.jp/news/2020/04/23/business/economy-business/j...)

Japanese electronics manufacturer NEC has secured a $190 million deal to supply an observation satellite to Vietnam. Vietnam is an ideal partner since it seeks to develop its capability to build and operate satellites. The contract entails the satellite launch, group equipment, and training for operators and engineers. The project will be financed by official development assistance, and the satellite will be launched in 2023. Since revenue from domestic business is unlikely to grow, NEC is shifting its focus to overseas markets (Mitsuru Obe, “NEC wins $190m deal to supply satellite to Vietnam,” Nikkei Asian Review, April 22, 2020, https://asia.nikkei.com/Business/Aerospace-Defense/NEC-wins-190m-deal-to...)

South Korea

The Korea Fair Trade Commission (KFTC) will need more time to review Delivery Hero’s $4 billion deal to acquire Woowa Brothers. The European online food delivery service applied for a review in December 2019 and expected a decision in April. However, KFTC said the acquisition would require a more comprehensive evaluation because each company accounts for about half of the Korean online food delivery service market. Thus, the deal could limit competition and prevent new businesses from entering the market (Kim Jae-heun, “Review or Delivery Hero-Woowa Brothers' deal to take longer time: KFTC,” The Korea Times, April 20, 2020, https://www.koreatimes.co.kr/www/tech/2020/04/694_288192.html)

Korea’s GS Engineering & Construction (GS E&C) has signed a deal worth roughly $450 million with the Singapore’s Land Transport Authority to build an Integrated Train Testing Center (ITTC) in cooperation with the Korea Railroad Research Institute. Specifically, GS E&C will build tracks to test trains and integrated systems before deployment. GS E&C’s technical capabilities and experiences were demonstrated through its construction of South Korea’s first comprehensive ITTC in North Chungcheong Province, which can test trains running up to 250 kilometers per hour (Jo He-rim, “GS E&C wins W550bcontract to build railroads in Singapore,” The Korea Herald, April 20,2020, http://www.koreaherald.com/view.php?ud=20200420000859)

*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.