MNCs in the News-2021-April

China

Tesla lately has encountered challenges in China. Its vehicles have been banned from military complexes, complaints on social media have increased, and, most recently, there was a high-profile protest at the Shanghai auto show. Its poor response to the protest drew attacks in Chinese official media. Observers noted Tesla’s woes in China “show how precarious China can be for big foreign brands and how a company's handling of an incident can turn into a crisis if the country’s tightly-controlled news outlets turn against it” (“Analysis: Tesla’s Bad Week in China was Months in the Making,” Reuters, April 22, 2021, https://www.reuters.com/business/autos-transportation/teslas-bad-week-ch...)

BNP Paribas, France’s largest financial firm, had its approval for the establishment of a securities firm in China accepted by the China Securities Regulatory Commission (CSRC). BNP Paris already has a corporate and institutional banking business and asset management joint venture in China. In recent years, many other foreign firms like DBS, Nomura, and JPMorgan have won CSRC approval to set up majority-owned security ventures inside China, hoping to take advantage of the country’s financial sector opening (“China Accepts France’s BNP Paribas’ Application to set up Brokerage Amid Uncertainty in Investment Deal with EU,” Global Times, April 27, 2021, https://www.globaltimes.cn/page/202104/1222287.shtml)

China is pouring much less foreign direct investment (FDI) into and offering less loans to energy rich African countries. Analysts believe this partly has to do with China’s ability to obtain greater amounts of oil from the Middle East. China, though, does seem to have a strong interest in African minerals such as cobalt and copper and, related to this, is boosting its investment in and loans to mineral rich countries like the Democratic Republic of the Congo (Jevans Nyabiage, “China is Switching its Investment Focus in Africa from Oil to Minerals,” South China Morning Post, April 25, 2021, https://www.scmp.com/news/china/diplomacy/article/3130912/china-switchin...)

According to China’s Ministry of Commerce (MOFCOM), China’s non-financial outward FDI (OFDI) in the first quarter of 2021 was USD $31.79 billion, representing a 4.6 percent growth rate over the same period in 2020. Growth in Belt and Road Initiative (BRI) countries OFDI was slightly higher at 5.2 percent year-over-year (YOY) and accounted for almost 18 percent of OFDI growth over the period. A couple of sectoral destinations showing notable growth in the 1st quarter were information transmission (20.9 percent) and manufacturing (17.8 percent YOY) (Zhong Nan, “Non-Financial ODI Grows by 4.6% in Q1,” China Daily, April 25, 2021, global.chinadaily.com.cn/a/202104/25/WS60876b27a31024ad0baba9c3.html)

Japan

In the wake of revelations that the data of Line, Japan’s largest social network, users was accessible by an affiliate in China, Line has worked to improve its information disclosures so users are clearer where their data might be transferred and stored. It also is working to limit the access that its group companies and subcontractors have to user data. Line also has been undergoing an investigation by Japan’s Personal Information Protection Commission subject to the country’s Personal Information Protection Law (Yoko Masuda, “New Line Privacy Policy Specifies Countries Where User Data Stored,” The Asahi Shimbun, April 1, 2020, www.asahi.com/ajw/articles/14322935)

In April, Rakuten, an online retailing giant, announced it finalized a capital injection. This drew attention because a major investment of $2.2 billion came from a subsidiary of China’s Tencent, which will make the subsidiary the sixth largest shareholder of Rakuten. Japanese government officials expressed concern about the adequacy of Rakuten’s disclosures, the impact of the investment on Rakuten’s business in the United States (US), and assured US officials they would act to prevent any leakage of personal information or technology to Tencent (“Tencent Unit’s Stake in Rakuten Sparks Fears over National Security,” The Asahi Shimbun, April 1, 2020, www.asahi.com/ajw/articles/14322934)

Korea

Korea’s Fair Trade Commission (KFTC) imposed a roughly $250,000 fine on Apple Korea in conjunction with its investigation of Apple’s abuse of its market dominance to unfairly shift various costs to Korean mobile carriers. According to the article, the fine relates to Apple Korea personnel limiting KFTC staff from accessing Apple Korea’s offices as well as disconnecting the corporate intranet (Kim Eun-jin, “Korea Fair Trade Commission to Accuse Apple Korea,” BusinessKorea, April 1, 2021, http://www.businesskorea.co.kr/news/articleView.html?idxno=63743)

In November 2020, Korea’s Personnel Information Protection Commission concluded that the US’s Facebook had violated Korean law by providing the personal information of 3.3 million users to other companies without first obtaining user consent. It also imposed a fine and filed a criminal complaint against Facebook. In the wake of this, a Korean law firm and local civic group are moving to organize plaintiffs to sue Facebook for its actions. There also have been other cases of Facebook sharing data without proper consent (“Korean Users Plan to Sue Facebook over Leaked User Data,” The Korea Times, April 19, 2021, https://www.koreatimes.co.kr/www/tech/2021/04/133_307436.html)

Prior to an upcoming summit between Korean President Moon Jae-in and US President Joe Biden, Samsung and Hyundai Motor reported prepare massive FDI plans attentive not only to Biden’s goals of not just boosting manufacturing in the US, but also improving US capabilities with respect to technology and alternative energy. These investments might relate to semiconductors, alternative energy vehicles, and solar power stations. One commentator speculated that FDI might be used as a tool to gain Covid vaccines from the US (Yi Whan-woo, “Samsung, Hyundai Prepare Massive US Investments Ahead of Moon-Biden Summit,” The Korea Times, April 26, 2021, https://www.koreatimes.co.kr/www/tech/2021/04/693_307829.html)

In February, the US International Trade Commission (ITC) ruled that Korea’s SK Innovation had stolen trade secrets relating to electric vehicle batteries from LG Energy Solutions. As a penalty, it, with some qualifications, imposed a ten-year ban on SK Innovation importing its batteries and components into the US. To settle the dispute, SK Innovation has agreed to pay approximately $1.8 billion to LG Energy Solutions, which will allow it to continue pursuing billion dollar FDI in battery plants in Georgia (Kim Bo-eun, “SK to pay $1.78 bil. to Settle Battery Dispute with LG,” The Korea Times, April 11, 2021, https://www.koreatimes.co.kr/www/tech/2021/04/133_306963.html)

*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.