MNCs in the News-2020 December


China’s National Development and Reform Commission (NDRC) and Ministry of Commerce (MOFCOM) have released the revised 2020 catalog of encouraged industries for foreign direct investment (FDI). It contains two sub-catalogs (one national and one for China’s central and western regions) and has a total of 1,235 items. A key catalog objective is to boost FDI in the aforementioned two regions. The catalog also seeks to boost FDI in manufacturing and producer services and areas like 5G, blockchain, and online health services (Shijia Ouyang, “China Releases New Catalog of Encouraged Industries to Spur Foreign Investment,” China Daily, December 28, 2020,

China’s NDRC issued rules relating to FDI national security reviews. The NDRC, which stressed that China was acting “in line with international practice,’ noted that “‘only by tightening the fence against security risks can China lay the solid foundations for a new round of opening up.’” In the new system, China will set up a body, headed by the NDRC and MOFCOM, to evaluate FDI in “military sectors and the acquisition of controlling stakes in such sectors as energy, natural resources, agriculture, internet technology and financial services” (“China issues National Security Rules on Foreign Investment,” Reuters, December 19, 2020,

China’s Standing Committee of the National People’s Congress, China’s national legislature, is considering draft Amendment XI to the Criminal Law which would result in stricter punishments for various intellectual property rights (IPR) crimes. Per Amendment XI, the “maximum prison term for [IPR crimes like] trademark and copyright infringements will be increased from seven to 10 years” (“China Mulls Heavier Criminal Penalties for IPR Infringements,” China Daily, December 22, 2020,

Chinese outward FDI (OFDI) has been dropping over the past four years. Still, Chinese OFDI (COFDI) seems to have found a new home in Latin America, with mergers and acquisitions (M&A) activity there in 2020 topping that in European and North American together. State Grid. Corp. of China stands out as one of China’s major players in Latin America with a USD $5.2 billion deal to acquire a power company in Chile. Boosting COFDI is the more favorable political environment in Latin America (Manuel Baigorri, “Latin American Emerges as China’s Favorite Hunting Ground for M&A,” Bloomberg, December 27, 2020,

During a news briefing, a China Foreign Ministry spokesperson emphasized “‘the investment on the BRI, including CPEC, has not declined, which is progressing well.’” Indeed, per the spokesperson, non-financial COFDI “in countries and regions along the Belt and Road increased by nearly 30 percent year-over-year in the first three quarters of 2020.” Even despite the Covid-19 pandemic, CPEC projects have not witnessed layoffs or shutdowns and some projects such as the Matiari-Lahore high-voltage transmission line, actually have been completed or opened for normal operations (“Investments on BRI Projects Not Dropping, including China-Pakistan Economic Corridor,” Global Times, December 28, 2020,

Per sources, Congress will provide $1.9 billion to “fund a program to remove telecom network equipment that the United States (US) government says poses national security risks as part of a $900 billion COVID-19 relief bill.” This funding relates to a decision of the US Federal Communications Commission (FCC) to require telecommunications carriers to remove equipment from China’s ZTE and/or Huawei. Separately, the FCC also banned US carriers from using US government funds to buy equipment from ZTE and/or Huawei (David Shepardson, “U.S. Lawmakers back $1.9 Billion to Replace Telecom Equipment from China’s Huawei, ZTE-Sources,” Reuters, December 20, 2020,


Japan has been seeking to attract financial firms, partly to exploit the fluid situation in Hong Kong. However, data show it is not faring well with more firms leaving than setting up operations even though the cost-of-living for many would be less than in other regional financial centers. Very tax rates on very high earners, language barriers, and Japan’s slow growth serve as major deterrents. To lure more financial firms, Tokyo will set up a one-stop service center and undertake tax reforms (Yuko Takeo, “Japan a Hard Sell for Bankers when Taxman Can Take Half,”, December 27, 2020,

Japanese 5G network companies have been given new opportunities to provide and build telecommunications infrastructure throughout the world due to the ban on Huawei in the US, Australia, and the United Kingdom (UK). Specifically, network equipment makers such as NEC Corp., Fujitsu Ltd., and NTT can now become bigger players in the global supply chain. The Japanese government already has provided hundreds of millions of dollars to suppliers to support the growth of the country’s 5G players (Gearoid Reidy and Ayaka Maki, “Handed a 5G Lifeline by Trump, Japan Races to Catch Up to Huawei,”, December 11, 2020,

The post-Brexit deal between the UK and the European Union (EU) removes some uncertainties for Japanese automakers in the UK. However, rules relating to automobile local content requirements to qualify for tariff free exports to the EU may create so many new costs (e.g., in terms of finding new suppliers) that it may no longer make sense for Japanese firms such as Nissan and Toyota to continue to produce their hybrid and electric vehicles in the UK (Craig Trudell and Siddharth Philip, “For Japan’s Automakers, Brexit Deal May be Too Little, Too late,” The Japan Times, December 29, 2020,

A Japanese group will supply $1.8 billion to build a coal-fired power plant in Vietnam. The plant will supply 1.2 gigawatts and help create a stable supply of electricity for Vietnam. Mitsubishi Corp. is an investor in the project, with the Japan Bank for International Cooperation (JBIC), a government owned institution, promising to lend almost 1/3rd of the total amount. Many have criticized JBIC’s support for the project, arguing that backing coal-fired power plants undermines efforts to fight climate change (Landers, Peter, “Japan Group to Lend Vietnam $1.8 Billion for Coal-Fired Power,” The Wall Street Journal, December 29, 2020,

South Korea

The Korea Fair Trade Commission (KFTC) will administer a survey to Google Play Store users as part of its efforts to “speed up its examination of Google’s new policy which would increase its commissions for application transactions to 30 percent.” There are worries the new policy might have significant adverse financial effects on local consumers, content creators, and software firms. The KFTC has investigated Google previously for hindering local firms from working with competitors and for forcing certain smartphone makers to use the Android OS platform (Jae-heun, Kim, “FTC Reviews Google's New Commission Policy,” Korea Times, December 28, 2020.

China’s State Administration for Market Regulation (SAMR) has unconditionally approved Hyundai Heavy Industries Holdings (HHIH) $1.8 billion acquisition of Daewoo Shipbuilding and Marine Engineering (DSME). SAMR has determined that the merger will not limit “fair market competition.” HHIH’s purchase still is contingent upon approval by regulatory bodies located in South Korea, Kazakhstan, Japan, Singapore, and the EU. The KFTC has yet to grant permission for the acquisition, but it is expected to approve it around the same time as the EU, which does have anti-trust concerns (Yoo-chul, Kim, “China Approves Hyundai-Daewoo $1.8 Bil. Merger,” Korea Times, December 28, 2020.

Korean battery makers such as LG Solution, Samsung SDI, and SK Innovation, are seeking to reduce their dependency on Chinese production and materials in the face of intensifying competition and uncertainties there. Some have turned to countries like Chile to ensure that they have sufficient supplies of Lithium; others have looked to Indonesia as both a supplier of raw materials and a production base; and yet others have strengthened deals with Korea firms to ensure they have the component and raw materials that they need (Bo-eun, Kim, “Battery Makers Seeking to Reduce China Dependency,” Korea Times, December 25, 2020,

South Korea’s LG Group has signed a Memorandum of Understanding (MoU) with Indonesia which entails a $9.8 billion investment to expand the supply chain for electric vehicle (EV) batteries that would involve the construction of a EV battery factory in Indonesia. Per the deal, Indonesia would become the first country to both mine for and produce EV batteries. Pursuant to the MoU, the EV batteries produced must use a minimum of 70 percent of nickel that has been processed within Indonesia (Christina, Bernadette, “Indonesia Says $9.8 Billion EV Battery MOU Agreed with LG Energy Solution,” Reuters, December 30, 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.