Donald Trump

MNCs in the News-2019-11-01

Chinese Vice Minister promises better treatment and protections for foreign direct investment (FDI), no forced tech transfers, and more rapid opening of financial sector. United States (US) contemplates new methods for increasing China’s protection of US intellectual property (IP) such as blacklisting repeat IP right violators. Chinese Ambassador in Malaysia stresses the needs for Chinese companies to deliver the goods as well as respect local laws and customs. Massive Laos high-speed rail project has many problems and multiple critics, but likely to continue given country’s desire to surmount its landlocked status. Japan’s Finance Ministry works to counter anxieties about Japan’s new FDI review regime by, among other things, providing more specifics. Toyota breaks with Honda about backing California’s new automobile emissions standards. Executives at Samsung Electronics and Samsung BioLogics faced serious accounting fraud charges relating to the revaluation of a stake in a US joint venture. Rising number of Korean firms in China report that they are increasingly affected by US-trade war.

MNCs-2019-10-04

China’s Financial Stability and Development Committee recently emphasized that the country will take further steps to promote “two-way financial opening.” Despite China’s general and targeted efforts to bring in more foreign investors, investors are holding back on investments partly because of China’s capital controls. It appears that Chinese venture capital (VC) flows into the US for 2019 will run even lower than 2015, a particularly abysmal year for VC investment. Iraq has said that it will sign on to China’s Belt and Road Initiative. The Japanese government has submitted a bill to the Diet pursuant to which the threshold for reviewing foreign direct investment (FDI) in sensitive sectors will plunge from 10 to 1 percent. Japan-Korea parliamentary unions work to facilitate the resolution of Japan-Korea economic and political tensions, though their actual influence seems limited. Automobile production by foreign firms in Korea is plunging to post-Great Financial Crisis levels due in part to labor problems. US President Donald Trump tweets for joy about Hyundai Motor Group’s joint venture with Aptiv.

MNCs in the News-2019-08-30

China’s plan to apply its social-credit system to foreign companies is raising concerns about possible abuses. China’s State Council announces it will establish pilot free trade zones (FTZs) in Shandong, Jiangsu, Guangxi Zhuang, Yunnan, Hebei, and Heilongjiang. United States (US) companies likely to stay in China despite trade war, a problematic regulatory environment, and US President Donald Trump’s call for them to leave. Although frictions over maritime issues remain unsettled, Chinese President Xi Jinping proposes joint oil & gas development in Reed Bank area to visiting Philippines’ President Rodrigo Duterte. Japan is paying more attention to tax shifting activities by high-tech companies and has recently forced Facebook to pay more in taxes for some questionable tax shifting activities. After the 7th Tokyo International Conference on African Development (TICAD), Japan and 53 African countries signed the Yokohama declaration which stressed “‘quality infrastructure investment.’” South Korea’s new policy for network fees has led to frictions with Facebook and service problems that led to fines which Facebook fought successfully in court. The Korea Startup Forum, the Korea Internet Corporations Association, and local and foreign content providers have called upon the South Korean government “to completely overhaul its network fee calculation structure.”

MNCs in the News-2019-07-05

Chinese Premier Li Keqiang announces China plans to create a better environment for foreign direct investment (FDI) in China. China’s financial opening leads various foreign investors to move to take control of their China joint ventures (JVs). Chinese outbound mergers and acquisitions (M&A) volume for the first six months of 2019 is the lowest since 2013. During a visit to China, Turkey’s President works to attract Chinese FDI and take advantage of the Belt and Road Initiative (BRI). With the activities of information technology giants gaining increased Japanese government scrutiny, the Japan unit of Facebook joins Keidanren. Japan’s export curbs on semiconductor materials bound for South Korea due to their dispute over forced labor compensation could pressure Samsung and the broader Korean economy. Japanese export controls on high-tech materials and chemicals used in South Korean semiconductor and smartphone manufacturing will stress Korean companies already feeling market and trade pressures. After a gathering between United States (US) President Donald Trump and the heads of major South Korean business groups, some Korean firms stated they would boost their US investments.

MNCs in the News-2019-06-28

President Donald Trump’s tough stance on intellectual property rights (IPR) violations seems to be driving China to treat foreign IPR more respectfully. At the Osaka G20 Summit, Chinese President Xi Jinping announces several measures China will undertake to open its market further to foreign direct investment (FDI) and improve IPR protection. This past week witnessed the creation of the Belt and Road Economic Information Partnership (BREIP). Two major BRI projects in Africa end. At the Osaka G20 summit, participating countries embrace Japan’s international principles for quality infrastructure. Japan tells two leading candidates for the British Prime Ministership it does not want a “no deal Brexit.” As part of its downstream growth and diversification strategy, Saudi Aramco and its affiliates have signed a dozen accords with South Korean companies covering sectors areas like shipbuilding, engine manufacturing, and petrochemicals. A consortium involving Korea Hydro & Nuclear Power (KNHP) and KEPCO Plant Service & Engineering (KPS) signs a five-year maintenance service deal for the Barakah nuclear power plant, but fails to garner responsibilities for maintenance services, nuclear scientists, and engineers.

MNCs in the News-2019-06-21

China Premier Li Keqiang works to lure foreign direct investment (FDI) during the Global CEO Council in Beijing. In 2018, the deal value of European mergers and acquisitions (M&A) activity in China soared by 856 percent to USD $9.94 billion. European Union (EU)-China talks on a Comprehensive Agreement on Investment and China’s negative list show better progress than expected. Brazilian Vice President welcomes Chinese FDI in infrastructure as long as it creates jobs and respects Brazilian rules. Around the time of the G-20, French President Emmanuel Macron will discuss issues about the Renault-Nissan alliance with Japanese Prime Minister Abe Shinzo. Numerous Japanese corporate subsidiaries in the United States have voiced opposition to Donald Trump’s proposal to slap tariffs of 25 percent on another $300 billion of Chinese products. Tokyo has requested Seoul to establish an arbitration panel consisting of representatives selected by other countries to help deal with their wartime forced labor compensation dispute. Seoul prepared to block a deal that would sell Taihan Electric Wire to a Chinese company because it deems Taihan’s high-voltage cable technologies a “‘national core technology.’”

MNCs in the News-2019-05-31

Foreign direct investment (FDI) and domestic firms, lured by, respectively, China’s consumer stimulus and attractive valuations may mitigate the adverse effects of the US-China trade war on China. The trade war and new regulatory environment is driving Fosun to limit its investments in United States (US) biotech companies and to turn its attention to emerging markets. Namibia amenable to China National Uranium Corporation taking over the world’s longest-running open pit uranium mine provided it respects Namibian employment laws. Japan tightens restrictions on FDI in its high-tech sectors. Japan’s Inpex Corp. strikes USD $20 billion framework deal with Indonesia to develop an onshore liquefied natural gas facility. Large Korean companies remain on the sidelines in the wake of the US’s action to limit the supply of parts to China’s Huawei. To protect their interests in China, Korean firms are courting Chinese party leaders, forming joint ventures, and investing billions of dollars in Chinese high-tech sectors.

MNCs in the News-2019-05-17

According to China’s Ministry of Commerce (MOFCOM), the growth rate of inward foreign direct investment (FDI) from the United States (US) into China over the first four months of 2019 dropped noticeably year-over-year (YOY). Beijing moves to tighten controls over technologies such as cloud computing, big data, and industrial security systems to bolster national information security. Expansion of American tariffs on Chinese goods drives more companies out of China. US Commerce Department’s proposed ban on hardware and service exports to Huawei could severely affect the firm and its American suppliers. Japanese companies working to use more foreign directors to enhance corporate governance and benefit from new thinking. Japan’s Toyota expresses dismay at US President Trump’s statement that “the US needs to defend itself against foreign cars and components.” FDI flows into South Korea for the first quarter of 2019 plummet YOY with some attributing it to the end of tax breaks. Hoping to position itself for the time when subsides for new energy vehicles (NEV) end, South Korea’s SK Innovation plans to open a second battery factory in China.

MNCs in the News-2019-05-10

The ongoing China-United States (US) trade war coupled with other economic and political factors drives more firms to consider other locations besides China. China moves to take more steps to protect intellectual property (IP), partly to assuage the concerns of foreign investors. China poured record amounts of investment into US start-ups last year despite Sino-American tensions, but there are dark clouds on the horizon especially in regard to investment screening. Security and other concerns lead US Federal Communications Commission hangs up on China Mobile’s effort to operate and offer service in the US. Not a single European country has joined Washington’s call to boycott China’s Huawei. Japanese banks move to improve their anti-money laundering and terrorist financing practices so as to increase chances of good Financial Action Task Force review. Japanese foreign direct investment in the US surges for political and economic reasons, with some “red states” seemingly benefiting from the former. Seoul police investigate if BMW Korea’s Chairman covered up automobile defects. Lotte Chemical launches USD $3.1 billion ethylene cracker complex in Louisiana with strong political support from Korea and the US.

MNCs in the News-2019-04-05

Chinese government shines light on subnational units that are making it difficult for foreign direct investment (FDI). China lubricating way for foreign energy giants to enter its petrochemical sector. Beijing is drafting rules to identify a list of BRI projects officially acknowledged by the Chinese government. China’s expansion in Latin America via the BRI raises US anxieties. British officials and senior labor union members will travel to Japan to press Honda to review its decision to shut down its United Kingdom (UK) Swindon plant. Toshiba experiencing delays in securing approval from the Committee on Foreign Investment in the United States (CFIUS) to sell its liquefied natural gas (LNG) business to a Chinese company. Korea Hydro & Nuclear Power (KHNP) risks bid to become long-term maintenance service provider of the United Arab Emirates (UAE) Emirates Nuclear Energy Corporation’s (ENEC) Barakah Nuclear Energy Plant because of its unilateral decision to replace plant’s workforce. Responding to a Saudi Arabian Cabinet member’s interview reporting “‘advanced’” talks, Hyundai Motor denied plans to build a new manufacturing plant in Saudi Arabia.

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