MNCs in the News-2021 March


In January, China’s new rules on foreign investment security review went into effect. A Ministry of Commerce (MOFCOM) spokesperson pointed out many countries have such rules and that they “won’t put an unnecessary burden on normal foreign business.’” The rules focus on foreign investment in “military and other areas concerning national defense and security, as well as major agricultural, energy, and resource areas that are critical to national security.” The spokesperson added China would continue to implement measures favorable to foreign investment (Zhong Nan, “Ministry: Rules on Foreign Investment Set to Safeguard National Security,” China Daily, March 19, 2021,

At China’s recent Two Sessions, a combined meeting of the National People’s Congress (NPC) and the China People’s Political Consultative Conference (CPPCC), the chairman of the NPC Standing Committee stated that China would press ahead with work to combat the extraterritorial application of “foreign sanctions, interference, and ‘long-arm jurisdictions.’” He specifically stated that the government would “‘enrich its legal toolbox for responding to challenges and guarding against risks.’” Many believe this is about the US, given the two countries’ frictions (Matthew Walsh, “Two Sessions 2021: China Plans to Beef Up Laws to Combat Foreign Sanctions,” Caixin, March 8, 2021,

The China Banking and Insurance Regulatory Commission (CBIRC) announced China had deleted a statute that prevented foreign investors from holding a stake of over 51 percent in a Chinese insurance company. The reform also entails the elimination of the requirement for a financial support statement when applying for a CBIRC business license which will speed the application process for firms seeking expanded operations in China. These measures will open further China’s domestic insurance market. Insurance investments also became subject to national security reviews (“China Scraps Foreign Ownership Cap in Insurance, adds National Security Review,” Global Times, March 20, 2021,

Retaliating against the imposition of European Union (EU) sanctions against China, China imposed sanctions against various members of the European Parliament (EP). This could imperil the EU-China Comprehensive Agreement on Investment (CAI) which was concluded at the end of 2020, but still requires EP ratification. Indeed, some EP members have demanded China terminate its sanctions before the CAI ratification process will proceed. Members of the EP already had been raising doubts about ratifying the CAI without China first having addressed EU forced labor concerns (Jim Brunsden and Yuan Yang, “Sanctions Row Threatens EU-China Investment Deal,” Financial Times, March 23, 2021)

Sweden’s H&M said in a statement on its website that it did not work with factories in Xinjiang or obtain inputs from there because of concerns about forced labor and human rights. This led Taobao and to remove H&M products from their sites. Several Chinese celebrities also terminated their contracts with H&M. A later statement from H&M saying it did not “‘represent any political stance….[and] has always respected Chinese customers’” did not assuage the many that attacked H&M for its original statement (Wang Xiaoyu, “E-commerce Sites Pull H&M Products after Company’s Xinjiang Statement,” China Daily, March 24, 2021,

Chinese executives at Chinese state-owned enterprises in Myanmar stated that Belt and Road (BRI) infrastructure projects in the country such as oil and gas pipelines, the Yangon New City, the Kyaukpyu deep water port, hydropower projects, and so on were not affected despite the violence directed at roughly 30 Chinese companies in an industrial park in Yangon. Some Chinese employees were returning to China and some firms were considering temporary shutdowns. The longer-term implications of the turmoil for Chinese firms is unclear (“BRI Projects Untouched Amid Attacks in Myanmar,” Global Times, March 15, 2021,


Brexit has reduced the number of Japanese firms in the UK, with the effect most pronounced in manufacturing and financial services. Still, employment at Japanese firms in the UK has not fallen dramatically and the UK has the “highest stock of Japanese foreign direct investment in Europe.” Remaining firms are waiting to see what kind of policies the UK may adopt to retain them and value the opportunities the UK presents in various areas. Many firms have shifted to Germany and the Netherlands (William Hollingworth, “Japanese Companies Still Gauging Future of Post-Brexit U.K.,” The Japan Times, March 25, 2021,

The chief executive of SBI Holdings, which is a financial conglomerate that owns Japan’s biggest online brokerage, will shift his company’s activities out from Hong Kong to London, Shanghai, or Singapore. The reason is Hong Kong’s National Security Law and his assessment that “‘without freedom, there is no financial business.’” Still, the issue seems to be less about freedom than regulatory uncertainty and the fact that it is easy to set up in China, which diminishes Hong Kong’s value as a gateway (Leo Lewis, “Japan’s SBI Plans Hong Kong pullout on concerns over security law,” Financial Times, March 7, 2021)

It was revealed recently that employees of Line’s Chinese affiliate had accessed the personal information of Japanese users. This led the company to block its “Chinese affiliates and contractors from accessing the personal information of Japanese users.” Line also moved some user data from its data centers in Korea to Japan. Line noted these actions were “‘not a question of legality. There was a lack of consideration for users.’” There is a rising awareness of data privacy issues in Japan (Wataru Suzuki, “Line Cuts off Access from China to Protect Personal Data in Japan,” Nikkei Asia, March 23, 2021,

In the wake of the coup in Myanmar, Japan’s Fast Retailing reported two of its suppliers in Myanmar were set on fire. The company said the turmoil in Myanmar would “lead to some delays in the production and delivery of products.” Foreign firms have been pressured to suspend operations in Myanmar, but Fast Retailing would only state it was “‘deeply concerned’” and had “‘started conversations with international stakeholders.’” For its part, Japan’s Kirin Holdings ended a partnership with a military-linked company after activist pressure (“Japan’s Fast Retailing Says Supplier Plants in Myanmar Set on Fire,” Reuters, March 16, 2021,

South Korea

Korea has been working to “nurture the capabilities of local industries” since Japan imposed economic sanctions against Korea in 2019. Covid-19 has accelerated Korea’s desire to “boost the competence of Korea’s materials, parts, and equipment industries in order to lower [its] dependence on foreign suppliers.” One government measure is the creation of focused industrial clusters (e.g., semiconductors and precision machines) in five regions of the country. Seoul will provide subsidies, build up infrastructure, and encourage cooperation between companies and research institutions (Baek Byung-Yeul, “Gov’t Ups Efforts to Nurture Local Materials, Parts, Equipment Industries,” The Korea Times, February 28, 2021,

Google Korea has told a Korean parliamentary committee that it would “it will cut the 30 percent rate on in-app purchases to 15 percent for app developers whose annual sales generated from its Play store are less than $1 million.” This follows complaints from Korean software makers and politicians after Google said it would not only institute a 30 percent commission on in-app digital purchases, but also impose a requirement that its payment system be used for app purchases in its Google Play store (“Google to Lower In-App Commission Rate for Small Developers,” The Korea Times, March 15, 2021,

South Korean companies have partnered with various major Chinese technology companies like Alibaba. There are increasing concerns Beijing’s tightening regulation of internet platform and fintech firms may present challenges for these partnerships. For instance, Chinese regulators rejected the plans of a KakaoPay joint venture with Alibaba Singapore Holdings, which may lead KaKao Pay to drop out of the venture. There also are concerns that Beijing “may misuse the regulations [e.g., Anti Monopoly Law] in order to hinder the growth of South Korean companies (Kim Eun-Jin, “China’s Digital Economy Regulations Adding Risks to South Korean Companies,” BusinessKorea, March 17, 2021,

In early March, the United States (US) International Trade Commission (USITC) issued a final ruling that SK Innovation stole the electric vehicle (EV) battery trade secrets of its rival LG Energy Solutions. This put in jeopardy a factory in Georgia that SK Innovation was building to supply EV batteries to Ford and Volkswagen because the USITC imposed a ban on SK Innovation importing certain items. In response, the Governor of Georgia asked US President Joe Biden to overturn the USITC’s ruling (“Georgia Governor Kemp Asks Biden to Overturn ITC Ruling against SK Innovation,” The Korea Times, March 14, 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.