MNCs in the News-2021-July


Per a China Ministry of Commerce (MOFCOM) report, utilized inward foreign direct investment (FDI) jumped 28.7 percent over the first half of 2021 compared to the prior year period. A very large percentage of the total inward FDI (IFDI) amount of USD $90.96 billion flowed into the service sector, with high-tech service IFDI flows showing a notable year-over-year (YOY) jump. In terms of IFDI sources, there was significant growth in YOY IFDI flows from Belt and Road Initiative (BRI) countries and the Association of Southeast Asian Nations (“China’s FDI Inflows Up 28.7% in H1,” China Daily, July 14, 2021,

A China MOFCOM spokesperson commented in regards to China’s national security screening of IFDI that the country would “carry out targeted reviews of foreign investments while avoiding across-the-board screening, so as to protect the legitimate rights and interests of foreign investors and effectively prevent and defuse nationals security risks.” He added “the direction of encouraging more FDI to come and develop in China will not alter” and that in this vein China would continue to open up and properly implement the FDI law” (“China to Conduct Targeted National Security Review of Foreign Investments: Ministry,” Global Times, July 15, 2021,

Last year, Sweden banned Huawei and ZTE from involvement in its 5G network because of worries about spying and the theft of intellectual property. It is perhaps no coincidence that Swedish telecommunication equipment maker Ericsson has experienced plunging sales in China. Indeed, Ericsson’s CEO stated “the group was likely to gain ‘materially lower market share’ in China” because of his government’s decision. The CEO previously attacked the ban, saying it would “restrict free competition and trade,” while top Swedish investors have also expressed displeasure (Richard Milne, “Ericsson Warns of China Retaliation Following Sweden’s Huawei Ban,” Financial Times, July 16, 2021)

Chinese firms are dramatically reducing their foreign currency-denominated borrowings, which is affecting outward FDI (OFDI) volumes. Indeed, it is possible loan volumes will reach a seven-year low in 2021 (the highest amount occurred in 2016 with the second highest occurring in 2017). Drivers of these developments include Beijing’s effort to restrain risky activities, decreases in economic activity relating to the pandemic, and increased sensitivities overseas to Chinese OFDI. Other factors include restrictions on the ability to do overseas due diligence and firm financial constraints (“China Crackdown Wrecks Demand for Loans to Finance Overseas Deals,” Caixin, July 27, 2021,

Changes in China’s relationship with the United Kingdom (UK) are driving the British government to reconsider the involvement of China’s state-owned enterprise (SOE) China General Nuclear in the country’s nuclear power sector. Power projects that might be affected include the multi-billion Sizewell nuclear power plant as well as the Bradwell-on-Sea power plant in which CGN is involved as developer, investor, and/or contractor. Further fueling the changed posture are UK concerns about a Chinese company’s involvement in the country’s critical infrastructure (Jim Pickard and Nathalie Thomas, “UK Looks to Remove China’s CGN from Nuclear Power Projects,” Financial Times, July 25, 2021)

In mid-July, Chinese President Xi Jinping had phone conversations with the leaders of Ukraine, Turkey, and Barbados. Xi highlighted the BRI numerous times. For example, in his conversation with Ukraine’s President he said, “the two sides should seek high-quality joint building of the Belt and Road Initiative, advance projects such as those regarding infrastructure and China-Europe freight trains.” Similarly, during the discussions with Turkey’s President, it was noted that “the two sides should promote the synergy of the Belt and Road and Turkey’s Middle Corridor Initiative (Zhang Yunbi, “Xi Highlights BRI, Global COVID fight,” China Daily, July 14, 2021,


During the 2nd quarter of 2021, the number of Japanese OFDI deals and the value of deals jumped significantly. Observers attributed it to the need of Japanese companies for growth as well as increased economic recovery (which allows Japanese firms to reduce their focus on defensive behaviors). Before the start of the Covid pandemic, “corporate Japan had been on a global M&A spree,” with the number of overseas deals hitting a record high in 2019. Japanese businesses have a strong appetite for foreign IT-related companies (Jada Nagumo, “Japan Inc Recovers Appetite for Foreign Acquisitions,” Nikkei Asia, July 5 2021,

Japan’s Ministry of Economy, Trade, and Industry will “call on the textile industry to craft guidelines to root out human rights violations, strengthen measures to address environmental issues, and establish a framework for disclosing its human rights practices.” In line with this, the industry plans to cooperate with the Japanese government and international organizations to ensure its supply chain is free of forced labor and other human rights abuses. Part of the motivation is to avoid the risk of boycotts and investment divestitures (Mayumi Hirosawa, “Japan Bolsters Human Rights Safeguards in Textiles over Xinjiang,” Nikkei Asia, July 11, 2021,

In the wake of 2020 Presidential election, Toyota’s political action committee (PAC)ceased donations to members of Congress who voted against certified the results of the election based on the false claim that the election was stolen. The PAC later resumed donations and indeed it was revealed that Toyota became one of the largest donors to election deniers. After a social media backlash and threats of a boycott, Toyota’s PAC once again opted to cease donations, saying it was important to be attentive to customer feedback (“Toyota Changes Stand, Halts Donations to US Election Objectors,” The Mainichi, July 9, 2021,


Korea’s Minister for Science and ICT said at a press conference that “‘imposing a tax on overseas platform businesses such as Google and Netflix is fine.’” However, she stressed one also needed to take into consideration the risk of taxes being imposed on Korean firms. The Minister added her ministry would pay attention to a recent ruling that leaves Netflix potentially responsible for sharing the costs of upgrading SK Broadband’s network because of the heavy data traffic resulting from its streaming services (Kim Bo-Eun, “ICT Minister Supports Taxing Global Platform Corporations Google, Netflix,” The Korea Times, July 5, 2021,

Korea’s National Assembly recently called attention to the country’s continuing OFDI flows over the past 10 years, a phenomenon witnessed even in 2020 when the Covid pandemic was raging. Korean companies are particularly active in investing in manufacturing and this has led the Export-Import Bank of Korea to express concerns this might undermine the country’s domestic manufacturing sector and cause unemployment. Korea’s OFDI continues to exceed its IFDI and has done so for many years over approximately the past 5 (Jung Suk-Yee, “Korean Companies’ Overseas Direct Investment Continuing to Increase,” BusinessKorea, July 28, 2021,

*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.