MNCs in the News-2020 August


China’s Ministry of Commerce (MOFCOM) announced that a new complaint mechanism—geared towards foreign business associations such as the American Chamber of Commerce and businesses entering China—will take effect on October 1. This mechanism replaces an interim mechanism in place since 2006, which started to be revised in 2019. Among other things, the new mechanism calls for complaints about the investment environment to be resolved within one year and also “forbids any clampdown on those filing complaints” (“New Complaint Mechanism for Foreign Investment to Take Effect Oct 1,” Global Times, August 31, 2020,

China’s Banking and Insurance Regulatory Commission approved United States (US)’s BlackRock Inc. and Singapore’s Temasek Holdings joint asset management venture. The joint venture (JV) is one of two asset management ventures that have been approved since Beijing announced last summer it would liberalize its financial sector. Other firms such as JPMorgan Chase also are interesting in entering the sector. Per reports, BlackRock and Temasek jointly will hold a 60 percent share in the new JV (Wang Liwei and Luo Meihan, “With BlackRock Venture’s Approval, More Foreign Firms Get a Shot a Managing Chinese People’s Money,” Caixin, August 24, 2020,

JPMorgan is forking out USD $1 billion to buy out its minority partner so it will have 100 percent ownership of its China mutual fund JV. This represents a 51 percent premium over the appraised value of the stake. JPMorgan wants to take advantage of China’s liberalization and is moving to get full ownership of all mainland China operations by 2021. It “was the first bank in the US to have received approval to take full control of its securities JV in China” (“JPMorgan to Pay 100% Premium to Own 100% Stake in China JV,” YahooFinance, August 25, 2020,

To win government contracts, pharmaceutical firms have offered price cuts of up to 95 percent during “China’s largest bidding round of its drug procurement program.” These contracts are for bulk public hospital purchases of drugs, worth tens of billions of dollars or more. 55 drugs, including some generating more than a billion dollar in sales, were covered during the bidding. Foreign companies “barely secured any contracts,” but might be able to sell outside the national scheme due to their brands (Roxanne Liu and Brenda Goh, “Drugmakers Slash Prices to Win China’s Bulk-Buy Contracts: State Media,” Reuters, August 20 2020,

The US-China trade war, new thinking about the distribution of supply chains, and other factors reportedly have prompted firms like Foxconn and Pegatron, which are prominent contract manufacturers for smartphone companies like Apple, to consider other locations such as Mexico for manufacturing or assembly plants. This could pour billions of dollars of foreign direct investment (FDI) into a country suffering badly from the Covid-19 pandemic. It remains to be seen if Mexico can win their investments (Sumeet Chatterjee, Yimou Lee, and Anthony Esposito, “Exclusive: Foxconn, Other Asian Firms Consider Mexico Factories as China Risks Grow,” Reuters, August 24, 2020,

Tensions between China and India due to their border dispute have led Alibaba Group to “put on hold plans to invest in Indian companies.” Alibaba will wait at least six months to expand its investments in India, but does not, at present, plan to reduce stakes or exist investments. To date, it has poured $2 billion into Indian companies and participated in funding rounds worth $1.8 billion. Firms such as Paytm, Zomato, and BigBasket may be affected (Aditi Shah and Sumeet Chatterjee, “Exclusive: Alibaba Puts India Investment Plan on Hold Amid China Tensions, Sources Say,” Reuters, August 26, 2020,

Washington recently blacklisted 24 Chinese companies because of their involvement in the construction of artificial islands in the South China Sea. Relevant firms include several businesses with links to China Communications Construction Co. (CCCC), Beijing Huanjia Telecommunications, Guangzhou Haige Communications Group, and China Shipbuilding Group. It remains to be seen what the implications of the US move actually are, but blacklisted Chinese firms may be constrained in accessing certain kinds of US goods or goods with US content (Susan Heavey, Daphne Psaledakis, and David Brunnstrom, “U.S. Targets Chinese Individuals, Companies amid South China Sea Dispute,” Reuters, August 26, 2020,

According to China MOFCOM data, “China's non-financial direct investments in countries along the Belt and Road (B&R) stood at $10.27 billion in the first seven months, up by 28.9 percent year-on-year” (YOY). B&R FDI represented 17 percent of China’s total non-financial outward FDI, up 4.5 percent YOY. Chinese firms also concluded $67.18 billion in contracting with B&R countries between January and July 2020, more than 55 percent of China’s total overseas foreign contracting activity during the period (“China’s Investment in B&R Countries Up 28.9%,” China Daily, August 21, 2020,


To boost FDI and the “profile of Japanese financial and capital markets,” Japan’s Financial Services Agency (FSA) will inter alia permit “applications for approval and registration to be submitted in English and speed up the processing times.” The change will be included in this year’s FSA guidelines and reflect the thinking of FSA Commissioner Ryozo Himino who previously had responsibilities for international affairs at the FSA. The guidelines also will highlight Japan’s stability at a time when other financial centers seem riskier (“Japan FSA to Push Globalization of Admin, Including Paperwork in English,” The Japan Times, August 27, 2020,

According to the aforementioned annual FSA guidelines, “Japan is considering tax reform to attract foreign financial firms and skilled workers in an effort to improve the country’s standing as a global financial center.” Beyond this, Japan will reportedly look at budgetary measures. Recently, Japan specifically mentioned an interest in luring Hong Kong residents employed in the financial sector or other specialized areas. As noted, the FSA also plans to increase the use of English to make it easier for foreign companies to enter Japan (“Japan Considers Tax Reform to Lure Foreign Financial Firms, Annual Policy Says,” The Japan Times,

In regard to China’s video app TikTok, a senior member of Japan’s Liberal Democratic Party (LDP) said on Japanese television, the US and “‘other countries such as the U.K. and India, are gradually becoming aware of the risks…Japan cannot just stand by and watch.” He highlighted the risk of data leakage and Japan being phased out of global supply chains for not protecting the security of its technologies. The LDP later intends to study the national security issues associated with Chinese apps (“Japan Shouldn’t Ignore Potential TikTok Data Risk Top LDP Official Says,” The Japan Times August 16, 2020,

One article recently reported Japan, India, and Australia are talking about a “‘supply chain resilience initiative,” with discussions taking place at the working level. Behind the initiative are the US-China trade war, frictions between multiple countries in the region (e.g., India and China), and Covid-19, which revealed the extent to which countries were dependent upon China not just for goods, but vital medical goods. Japan already has established a program to encourage companies to return to Japan or move to Southeast Asia (“Japan, India, and Australia Eye ‘Supply Chain Pact’ to Counter China,” The Japan Times, August 23, 2020,

South Korea

In light of serious data privacy and national security concerns, Korean regulators are closely watching Indian, Japanese, and US moves against China’s TikTok prior to making a decision about what action will be taken against the popular mobile app, if anything. This year, the Korean Communications Commission already imposed a large fine on “TikTok for collecting personal information of users under the age of 14 without parental consent and not previously notifying users about transferring the collected data to its corporate servers oversea” (Kim Yoo-Chul, “Korea Monitoring US, Japan for Possible Ban on TikTok,” Korea Times, August 9, 2020,

India intends to prevent Chinese telecommunications firms such as Huawei and ZTE from participating in its 5G network because of national security worries. This may create opportunities for Korean firms such as Samsung Electronics because Samsung is one of the world’s largest 5G equipment makers. Samsung already has been chosen to be one of the equipment suppliers for Indian local telecom operators’ 5G trials, pending approval. Still, Samsung faces stiff competition from European players such as Ericsson and Nokia (Baek Byung-Yeul, “India’s Huawei Ban Helps Samsung See Market Share Gains in 5G Network Biz,” Korea Times, August 23, 2020,

*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.