EU

MNCs in the News-2018-12-14

Inward foreign direct investment (FDI) into China for the first 11 months of 2018 year-over-year relatively stable. Beijing stops requiring its local governments to support the Made in China 2025 policy. European Union Ambassador to China calls on China to stop requiring companies to transfer technology for market access. Apple considers moving some production out of China due to possibility of increased tariffs on its China-produced smartphones and laptops. 2018 proves a tough year for Chinese outward FDI (OFDI) in the oil sector. Huawei accepts various UK technical requirements “to address risks in its equipment and software.” Following a Japanese government’s decision that effectively excluded China’s Huawei Technologies Co. and ZTE Corp. from public procurement, Japan’s three major mobile phone carriers Softbank Corp., NTT Docomo Inc., and KDDI Corp. plan to stop using various products from these companies. Japanese expert panel calls on Tokyo to take measures to protect the usage of consumer data. Korea Electric Power Corp. report on Northeast Asia power grid notes it would face serious challenges because of sanctions on North Korea. Beginning July 2019, Korea will impose a value-added tax on a wider range of services provided by global technology giants to level the playing field for Korean firms.

Dr. Jean-Marc F. Blanchard's picture

Europe and Chinese Foreign Direct Investment: Screening the Screen

Chinese outward foreign direct investment (FDI) is not a particularly new story as far as European Union (EU) countries are concerned.

MNCs in the News-2018-11-30

China moving to improve the business environment for foreign companies, especially in Free Trade Zones (FTZs). China’s National Development and Reform Commission (NDRC) announces that it will permit foreign banks in China to apply for approval for a quota increase in their medium to long-term foreign debt for 2019. Per Donald Trump, the United States may take a bite out of Apple products coming from China which previously have escaped a special 10 percent tariffs on Chinese goods. China’ Huawei finds Kiwis not so soft after New Zealand’s intelligence agency blocks it supplying 5G mobile network equipment to the major domestic telecom provider. Maldives’ new finance minister criticizes true price of Chinese projects, which has led to the Maldives returning to an “India First” policy. Japan’s Mitsubishi Heavy Industries ordered by South Korea’s Supreme Court to pay USD $365,500 in damages to two groups of South Koreans for forced wartime labor. In post-Carlos Ghosn arrest meeting, France suggests to Japanese official “the head of the Renault-Nissan alliance should be from the French automaker.” European firms with business in South Korea push Seoul to upgrade the country’s business regulations to reach international standards. At the 6th Association of Southeast Asian Nations (ASEAN) Connectivity Forum, South Korea’s secretary-general of the ASEAN-Korea Centre states Korea is looking to improve relations with ASEAN countries especially in infrastructure area.

MNCs in the News-2018-11-23

China working to improve opportunities for foreign players in its insurance sector. Shanghai looks to improve services for foreign companies which have a major presence in the city and are a major contributor to its economic successes. European Union moves forward on inward foreign direct investment (FDI) screening mechanism that is not directed at, but has a lot to do with China. Pursuant to Foreign Investment Risk Review Modernization Act (FIRRMA) the United States (US) Committee on Foreign Investment in the US (CFIUS) will now screen much smaller deals in various sectors newly deemed critical, greatly affecting Chinese deals. Philippines’ President Rodrigo Duterte’s move towards China does not seem to have paid off in terms of increased Chinese outward FDI (OFDI) and infrastructure in the Philippines. US prosecutors investigating Mitsubishi UFJ (MUFJ) for potentially allowing North Korea to launder money. To push forward infrastructure projects, Japanese Prime Minister advisor meets with Filipino officials soon after visit of Chinese President. South Korean manufacturers turn attention from China to Vietnam which offers a better policy, tax, and labor cost environment. South Korea’s POSCO Engineering & Construction Co.-led consortium wins major power plant contract in Malaysia.

MNCs in the News-2018-11-02

Shanghai moves to make life easier for foreign direct investment (FDI) as anxieties grow that FDI may leave. Germany’s Federation of Germany Industries’ position paper calls for German businesses in China to limit their dependence on China. Australia’s exclusion of firms with government ties from its new 5G network mean no involvement by Huawei, leading to Chinese government criticisms. Chile signs on to China’s Belt and Road Initiative. During an official meeting between Japanese Prime Minister Abe Shinzo and his Indian counterpart Narendra Modi, Tokyo pledged USD $2.8 billion in new loans for seven projects in India including the construction of a high-speed shinkansen system and roads. Recent South Korea Supreme Court ruling that Japan’s Nippon Steel must pay compensation to Korean World War II forced laborers leaves roughly 70 Japanese firms facing similar cases on edge. Samsung pledges to increase its contribution to Vietnam while Vietnam pledges to keep improving business environment for the firm.

MNCs in the News-2018-09-07

International Monetary Fund (IMF) calls China’s investment and service trade environment “very restrictive.” US tariffs and environmental rules severely constrain Chinese firms, creating space for Japanese chemical firms. Muji pondering moving HQ from the United Kingdom (UK) due to tax and trade complications flowing from Brexit. New South Korea government penalty scheme relating to recalled vehicles following BMW’s massive recall raises trade secret loss anxieties among South Korean firms. Meeting between high-ranking Hyundai official and Indian Prime Minister Moti leads Hyundai to promise a leading role in helping develop India’s electric vehicle industry.

MNCs in the News-2018-06-29

China’s National Development and Reform Commission (NDRC) unveils new nationwide negative list which opens about 17 more sectors and reduces various restrictions. China’s Ministry of Commerce (MOFCOM) and NDRC released a revamped negative list for foreign direct investment (FDI) in China’s free trade zones (FTZs) that has some better features than nationwide negative list. United States apparently to go with enhanced Committee on Foreign Investment in the United States (CFIUS) review process rather than establish mechanisms that specifically focused on restraining Chinese FDI. Nissan picks Thailand as first export market for new hybrid cars which may lead to local production if results and investment incentives are attractive. Sumitomo Mitsui Banking Corporation signs memorandum with Thailand’s governmental agency that the latter hopes will boost FDI. Samsung’s managing leaders recently convened to discuss a growing “China problem” as company confronts various political and regulatory problems. Taiwan’s GlobalWafers intends to follow through on USD $450 million Korean production facility amid increased Sino-US trade tensions. Malaysian government optimistic that investors’ confidence will be restored partly due to Prime Minister Mahathir’ effort to court FDI. Survey reveals Japanese companies interested in setting up manufacturing bases in Malaysia and are looking to invest in new sectors.

MNCs in the News-2018-06-15

Investigation reveals Foxconn factory in China supplying Amazon products has serious problems regarding labor conditions. Chinese outward foreign direct investment (FDI) for first five month of 2018 shows impressive growth over 2017. China’s SF Motors drives ahead in effort to build electric vehicle manufacturing plant in Indiana (United States). Fears about potential Chinese dominance lead Vietnam to protest their government’s special economic zones plan. Japanese firms making own deals with American states that “go their own way” in pursuing investment opportunities. Mexico’s Economy Minister visiting Japan as country seeks to diversify investment and exports amid NAFTA talks impasse. Korean firm announces $1.7 billion investment plan for liquefied natural gas infrastructure in Philippines following President Duterte’s recent Seoul visit. South Korean construction companies forming task forces and planning investments in North Korea following US and North Korea summit. Mahathir set to “woo investors and offer business deals” during recent Japan visit. Malaysian state Perak to cooperate with EU to strengthen investment cooperation.

MNCs in the News-2018-06-01

China’s inward foreign direct investment (FDI) shows growth with especially impressive growth in high-tech areas like medical equipment manufacturing. Slew of political factors conspiring to dampen Chinese outward FDI (OFDI) to the United States (US). European parliament pushing increased reviews of FDI, partly due to surge of Chinese OFDI in Europe. China’s first report on central state-owned enterprises (SOEs) corporate social responsibility (CSR) argues their efforts go unnoticed and that they are doing a good job in environmental protection. Japanese contractors blindsided by Malaysia’s decision to scrap planned USD $14.8 billion high-speed rail link from Kuala Lumpur to Singapore. Government representatives of China, Japan and Thailand announce intentions to pursue business collaboration in Eastern Economic Corridor. General Motors’ $7 billion rescue plan for South Korean plants in jeopardy because of threat of Trump tariffs on foreign cars and car parts. Hanwha Q CELLS Korea signs memorandum of understanding with Whitfield County government to construct solar module production facility. Mahathir announces reconsideration of terms of USD $14 billion rail deal involving Chinese partners to prioritize reducing country’s ballooning national debt. Malaysia’s state-owned Petronas to become second-largest partner in Canadian liquefied natural gas export project by buying 25 percent stake.

MNCs in the News-2018-03-09

China National Development and Reform Commission (NDRC) states China will improve noticeably market access and operating conditions for foreign direct investment (FDI) this year. American Chamber of Commerce in South China reports that number one concern of American businesses in China because of the is China's cybersecurity law. European Union (EU) may adopt legislation relating to inward FDI this year as a result of rising security concerns especially where Chinese FDI involved. Beijing's controls on outward Chinese FDI do not dent Fosun acquisition spree in clothing and luxury goods areas. Nissan in talks with Renault to acquire bulk of French state's 15 percent Renault stake. Japanese companies still waiting to see what happens with Great Britain's EU Brexit negotiations before deciding how to react to Brexit. GM Korea to ask Korean government to make its Korean factory sites foreign investment zones so it can get tax concessions. Doublestar reaches agreement with Korea Development Bank on purchase of 45 percent stake in Kumho Tire as union protests continue. Jakarta makes it easier to invest in energy and mineral sector by reducing regulations and licensing burdens. Prudential in talks with Malaysia's second largest pension fund to sell 30 percent stake in Malaysian unit following Malaysian central bank move to reduce foreign investment stakes. Telekom Malaysia signs memorandum of understanding with Huawei to work together on expanding fiber broadband network reach in Malaysia. Vietnam revokes investment license for foreign-owned oil refinery project. Legal expert says that foreign investors are interested in developing infrastructure projects in Vietnam including the North-South highway but hesitate because of legal problems.

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