MNCs in the News-2020 May


China recently issued a guideline to “accelerate the improvement of its socialist market economy.” Regarding foreign direct investment (FDI), the guideline noted, “the country will improve the market, policies, rule of law and social environment for supporting the development of…foreign-invested enterprises.” It added “equal treatment should be given to firms of various types of ownership in obtaining production factors…operation, government procurement and bidding.” It also called for improved intellectual property rights protection and full implementation of the negative list (“China unveils Guideline to Accelerate Improving Socialist Market Economy,” State Council of the People’s Republic of China, May 19, 2020,

“China is ready to put United States (US) companies in an ‘unreliable entity list,’ as part of countermeasures against Washington’s moves against Huawei.” Specific measures might include launching investigations against, impossible restrictions on, and suspending purchases from American businesses. At risk American firms potentially include Apple, Boeing, Cisco Systems, Qualcomm, among others. As for Washington’s moves, the U.S. Commerce Department say it would work to hinder Huawei’s purchase of “‘semiconductors that are the direct product of certain U.S. software and technology’” (“China Ready to Put Apple, Other U.S. Companies in ‘Unreliable Entity List’: Global Times,” Reuters, May 15, 2020,

Reacting to the Donald Trump administration’s efforts to shift supply chains out of China, the US Chamber of Commerce “warned against overdoing a major effort…to rip U.S. supply chains out of China…saying such moves could harm the economy.” The Chamber’s CEO stated improved supply chain resiliency did not “‘mean reshoring all production in the US.’” Furthermore, the US still had a “‘huge place’” for a “‘global supply chain.’” Per one administration official, “ensuring domestic production in critical industries was a “‘real high priority’” (Andrea Shalal, “Business Groups Cautions U.S. on ‘Reshoring’ Too Much China Supply,” Reuters, May 20, 2020,

The United Kingdom (UK) intends to “reduce Huawei Technologies’ involvement in the country’s 5G mobile network development.” Not only does Huawei face a reduction of involvement, but it may be completely removed from all British infrastructure by 2023. Some interpret the UK’s moves against the Chinese telecommunications firm as an effort to curry favor with the US prior to free trade talks. UK Prime Minister Boris Johnson reportedly also has asked his administration to find other ways to reduce strategic imports from China (“UK Plans Cut in Huawei’s 5G network Involvement: Report,” South China Morning Post, May 23, 2020,

Over the balance of 2020, China Railway Group Ltd. (CREC) plans to complete more than USD $500 million of work on the Jakarta-Bandung high-speed railway (HSR), a Belt and Road Initiative project. The Jakarta-Bandung HSR is the first HSR in Indonesia, China’s first overseas HSR project, and involves a consortium of various Indonesian and Chinese state-owned enterprises. China is “exporting its technical standards,” doing surveys and design, construction, and equipment manufacturing, and providing materials and management. The project has not yet been affected by Covid-19 (Zhong Nan, “Construction on Track for Indonesian High-Speed Rail,” China Daily, May 22, 2020,

Under US pressure, Israel rejected a bid from Hong Kong’s CK Hutchison Holdings to construct the $1.5bn Sorek 2 desalination plant and awarded the contract to a local consortium. Israel’s security establishment already had criticized CK Hutchinson’s tender, pointing out the project is close to an Israeli air force base and would allow Chinese to observe sensitive military programs. Increased American pressure on Israel regarding Chinese FDI in Israel, among other things, already drove the latter to set up a FDI review committee (Mehui Srivastava, “Israel Rejects Hong Kong Group’s Bid for $1.5bn Water Project,” Financial Times, May 26, 2020)


Japan has announced a list of companies subjected to new rules restricting foreign investment. The list categorizes more than half of listed companies in Japan into three groups: core industries, which include blue-chip firms like Toyota and Softbank; non-core industries; and companies that are exempt from restrictions. It is part of the Foreign Exchange and Foreign Trade Act, which requires foreign investors to report in advance when they buy more than one percent stake in designated firms (Gearoid Reidy and Shoko Oda, “Japan moves to limit foreign investment in half of listed firms,” The Japan Times, May 11, 2020,

In tandem with other countries’ efforts to regulate tech giants, Japan’s parliament has enacted a law to tighten regulations on major technology companies like Amazon and Google. The law requires companies operating e-commerce websites and apps to submit annual business activity reports to the authority, give advance notice of contract changes, and establish a complaint process. It aims to address concerns that some tech giants might exploit their market dominance to mistreat merchants, especially after the coronavirus pandemic provided a boost for online sales (“Japan enacts law toughening transparency regulations on tech giants,” The Japan Times, May 27, 2020,

The Japanese government will introduce a $220 million subsidy program to assist companies in diversifying their supply chains by returning to Japan or relocating to Southeast Asia (SEA). Japanese firms have increasingly viewed SEA as a potential production base to avoid risks associated with overreliance on China such as increased tariffs relating to the US-China trade war. The coronavirus outbreak in Wuhan, which left Japanese automakers and manufacturers facing many parts shortage, added urgency to the initiative (Keita Nakamura, “Japan to help shift manufacturing to ASEAN from China after virus disrupts supply chains,” The Japan Times, May 5, 2020,

South Korea

According to the Federation of Korean Industries, reported FDI in South Korea for the first quarter of 2020 increased 3.2 percent to $3.27 billion, while realized FDI dropped to $2.41 billion, a 17.8 percent decline compared to the same period last year. In 2019, FDI in South Korea fell for the first time in five years to $10.57 billion. Firms cited shorter working hours, a higher minimum wage, and the elimination of corporate tax incentives as factors that led to the poor results (Jung Suk-yee, “Foreign Direct Investment in South Korea Drops in Q1,” Business Korea, May 21, 2020,

South Korea’s National Assembly recently approved a revision in the telecommunication business act requiring responsibility from local and foreign content providers in supplying stable services. This revision provides Korean authorities with legal grounds to press companies like Netflix to share network costs with local internet service providers, who have been dealing with heavy data traffic due to an expansion of online content services. The telecommunication industry welcomed this move and Netflix said it respects the parliament’s decision and will continue to offer good services (“Netflix pressed to share network costs in S. Korea,” The Korea Herald, May 21, 2020,

US government officials have been touting the Economic Prosperity Network (EPN) initiative which some Koreans see as an American effort to push decoupling with China. The EPN worries Korea companies since they feel they might face huge pressure to move FDI to the US and to limit their FDI in China. The latter could be quite costly for them given Korea’s extensive trade with China (and its associated trade surplus) as well as Korean companies’ huge manufacturing operations in Korea (Jung Suk-Yee, “Korea Companies Facing Growing U.S. Pressure to Move Production Bases to U.S.,” Business Korea, May 22, 2020,

Korea’s NH Investment & Securities is part of a consortium that won a bid to invest $8 billion to acquire a 49 percent stake in a natural gas pipeline held by the United Arab Emirates’ Abu Dhabi National Oil Corp. The winning consortium includes the US’s Global Infrastructure Partners, Snam, Singapore’s sovereign wealth and several Canadian entities. The deal most likely will be the largest infrastructure investment in 2020. NH Investment & Securities has invested in infrastructure in Europe and elsewhere (Yoon Young-sil, “NH Investment & Securities to Participate in US$8 Bil. Infrastructure Deal,” Business Korea, May 18, 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.