European Union

Inward foreign direct investment (FDI) into China shows decent growth in the first quarter of 2019 with United States (US) FDI showing particularly strong growth. China announces moves to open its banking and financial sectors further. The United Arab Emirates (UAE)’s strategic location allows it to snare USD $3.4 billion Belt and Road Initiative (BRI) deals. Cambodia throws the dice for more China FDI deals while shifting further away from the European Union (EU). Japan ponders proposing rules to increase transparency and responsible financing for infrastructure investment in developing countries during the upcoming Group of 20 (G-20) summit. Lawyers representing South Koreans forced to labor for Japanese corporations during World War II requested a court to sell assets seized from relevant Japanese firms. South Korea Prime Minister Lee Nak-yon lobbies Kuwait to allow more South Korean companies to participate in infrastructure project in the country.

Recent report forecasts massive increase in China’s inbound mergers and acquisitions (M&As) between 2020 and 2029. Pursuant to its trade negotiations with the United States (US), China considers eliminating entrance barriers to its cloud computing market like requiring overseas companies to form joint ventures (JVs) with Chinese firms. Chinese and European Union (EU) leaders commit to conclude a bilateral investment treaty (BIT) by next year. At the summit of Central and Eastern European countries and China in Dubrovnik, Greece announces it will join China’s 16+1 Initiative. Following the EU and United Kingdom’s delay of Brexit by six months, Tokyo pledged to continue to lobby against a no-deal Brexit and to monitor developments. Regarding the Carlos Ghosn case, France stressed to Japan that it respects the sovereignty of Japan’s judicial system and also would provide consular protection to Ghosn. Korean companies lobby their government to deal with the EU’s growing pressure on South Korea to ratify key International Labor Organization (ILO) conventions

According to China’s Ministry of Commerce (MOFCOM), inward foreign direct investment (FDI) for the first two months of 2019 grew 5.5 percent year-over-year (YOY). China’s State Administration of Foreign Exchange (SAFE) makes it easier for foreign companies to manage their foreign exchange. Italy may open four ports to Chinese FDI as part of its participation in the Belt and Road Initiative (BRI). Germany to establish state-owned fund to protect key companies from takeovers by foreign companies, especially Chinese ones. Koreans forced to work for Japanese corporations without compensation during World War II are rushing to file lawsuits before the statute of limitations runs out. Toyota announces it will build a new hybrid car in Britain for its Japanese peer Suzuki despite Brexit uncertainties. South Korea’s Gyeonggi Province considers bill requiring schools to put “‘war criminal tags’” on products manufactured by Japanese firms. South Korea’s S-Oil and Hyundai Oilbank will pay USD $127 million in fines to the United States (US) Justice Department for fixing fuel prices at US military bases in Korea.

China’s National People’s Congress (NPC) to consider new draft law on foreign direct investment (FDI) that seeks to provide stronger legal guarantees to overseas investors. About 1/3rd of North American-based corporations on the CNBC Global CFO Council say Chinese companies have stolen their intellectual property (IP) at some point in the past ten years. Mirroring global trends, Chinese FDI in Europe fell drastically in 2018 and a recent survey suggests the European Union (EU)’s new investment screening framework likely will curb Chinese EU mergers and acquisitions even more. Italian economic development ministry official announces Italy is planning to join China's Belt and Road Initiative (BRI). Faced with Mitsubishi Heavy Industries Ltd.’s refusal to negotiate, South Korean plaintiffs who won a wartime forced labor case against the company file court request to seize the company’s assets. Toyota Motor Corp. announced last week it may pull out of production in Britain due to the likely increase of tariffs in the case of a no-deal Brexit. Hyundai Motor is considering suspending operations at its Beijing manufacturing plant partly due to plummeting sales and partly due to budding opportunities elsewhere. South Korea’s Ministry of Economy and Finance reports Korea’s OFDI reached a record high in 2018 partly due to Korean companies going abroad to enjoy a better manufacturing environment.

Per China’s Ministry of Commerce (MOFCOM), inward foreign direct investment (FDI) flows in January increased 4.8 percent versus the prior period in 2018. Despite United States (US)-China trade dispute, in January, China’s IFDI from the US increased 126.8 percent compared to the same period in 2018. European Parliament revamps European Union (EU) investment screening mechanism to give European Commission power to review deals, though ultimate decision making remains with EU states. U.S.-China Economic and Security Review Commission highlights personal and national security risks from Chinese investors taking stakes in American biotech companies. Israel will create an interagency body to oversee sensitive commercial deals partly to ensure foreign investments, above all by China, do not damage its ties with the US. Japanese and South Korean businesses fret about the impact of heightened tensions between the two governments relating to history and recent naval encounters. Per reports, following Malaysian Prime Minister Dr. Mahathir Mohamed’s visit to Tokyo last year, major Japanese companies invested hundreds of millions in Malaysia. Russia will take more steps to support Koreans firms doing business in Russia’s Far East. South Korea and Austria move to expand cooperation as Austria seeks Korean help to become a 5G leader in Europe.