India

MNCs in the News-2020 November

Foreign direct investment (FDI) into China continues to surge despite Covid-19 and other challenges. China’s Ministry of Commerce says China will take further measures to liberalize ownership restrictions for foreign firms in the service sector. Shanghai shows strength in attracting inward FDI (IFDI) and adds to its regional headquarters and research and development center totals. India moves to ban an additional 43 Chinese phone apps including Aliexpress due to concerns about consumer privacy and national security. China states it will continue to support the construction of the China-Pakistan Economic Corridor (CPEC). Malaysian state government of Melaka terminates $10.5 billion Melaka Gateway project. Nissan moves to sell only electric vehicle (EV) or hybrid cars in China to meet Beijing’s goal of all new vehicles being eco-friendly. The Regional Comprehensive Economic Partnership (RCEP) is expected to have notable impacts on Japanese FDI as well as supply chains given its provisions relating to tariffs, rules of origins, and intellectual property. Brexit may lead the European Union (EU) to slap tariffs and other requirements on EVs which have significant adverse effects on Japanese EV production in the United Kingdom. Tokyo Gas and Marubeni will construct a liquefied natural gas fired power plant in Vietnam. Korea’s Fair Trade Commission reportedly has come to the conclusion that Google abused its market position to prevent modified Android operating systems. The labor union at IKEA Korea strikes for similar wage treatment to workers at IKEA workers elsewhere. Some Korean steelmakers return back home due to government subsidy program. Korean consortium wins engineering, construction, and operations contract for $1 billion bridge project in Bangladesh.

Dr. Amitendu Palit's picture

Resilient Supply Chain Initiative (RSCI) and its Prospects

Covid-19 is refashioning relations among countries. One example is the Resilient Supply Chain Initiative (RSCI), proposed by India, Japan, and Australia, which aims to assemble a coalition of countries, ostensibly middle powers and reasonably large economies, to restructure supply chains in a way that reduces economic dependence on China.

MNCs in the News-2020-September

China’s Ministry of Commerce (MOFCOM) issues rules relating to China’s long-discussed “unreliable entities” list. MOFCOM tells foreign companies not to worry about unreliable entities list as it is not targeted at any specific country or company. China’s State Administration for Market Regulation is preparing to launch an antitrust investigation into Google relating to Google’s alleged abuse of the Android mobile operating system’s dominant position. MOFCOM, China’s National Bureau of Statistics, and the State Administration of Foreign Exchange issue report showing Chinese outward foreign direct investment (FDI) fell 4.3 percent year-over-year in 2019. Chinese outward FDI (OFDI) in the United States (US) plummets to record lows because of Covid-19 and US-China political frictions. Indian Minister says there will be no blanket ban on all Chinese mobile apps, nor will Chinese companies be excluded from 5G contracts for wireless equipment. The tightening of US restrictions on the export of semiconductors will have potent adverse effects on Japanese companies. Frictions relating to the fees Apple takes in conjunction with its App stores have sparked regulatory attention in Japan. Covid-19 and the resignation of former Prime Minister Abe Shinzo are hindering the expansion of Japanese OFDI in Africa. Hitachi may terminate its multi-billion-dollar project in the United Kingdom (UK) to build two nuclear reactors because of a failure to obtain UK government support to cover rising project costs. Korean semiconductor firms will suffer big loss of business due to new US restrictions on the export of semiconductors to Huawei. Korea Fair Trade Commission apparently sends signal to Google that it is being watched for its app store fee collection practices. Korea’s Hyundai Engineering & Construction led consortium wins $573 million railway project in the Philippines.

MNCs in the News-2020 August

On October 1, China will establish a new compliant mechanism that, among other things, will allow foreign business associations to raise concerns about the investment environment. China’s Banking and Insurance Regulatory Commission has given permission for a second foreign asset management joint venture (JV), involving BlackRock and Temasek. Looking to exploit China’s financial sector opening, JPMorgan will spend a huge amount of money to take full control of its China mutual fund JV. Foreign pharmaceutical companies fail to win public hospital bulk medicine purchase contracts in China due to an apparent unwillingness to cut prices to near zero. China based firms such as Foxconn reportedly looking at expanding their presence outside China in countries such as Mexico due to troubled political economic environment. Sino-Indian tensions drive Alibaba to suspend plans for new investments in India. US backlists 24 Chinese firms because of their role in the building of South China Sea artificial islands. Chinese outward foreign direct investment (FDI) in Belt and Road countries jumps nearly 29 percent for the first seven months of 2020 year-over-year. Japan will move to improve administrative procedures, such as allowing English paperwork, to draw in more FDI and improve Japan’s prominence as a financial center. Japan is considering tax and other measures to enhance Japan’s role as an international financial center. A Japanese ruling party official raises concerns about TikTok with respect to data privacy and national security. Japan, Australia, and India are discussing a supply chain resilience initiative. South Korean regulators are watching what the US, Japan, and India do vis-à-vis TikTok before they decide how to address relevant data privacy and national security concerns. India’s exclusion of Chinese telecommunications players like Huawei and ZTE from its 5G network may create openings for Korean players.

Dr. Hwy-Chang Moon's picture

More or Less Globalization? Thinking about the Real Lessons of Covid-19

Many contend the lesson of Covid-19 is the need to reduce global business activities, particularly the United States (US)’s dependence on China for imports of manufactured goods. They further assert American multinational corporations (MNCs) operating overseas, particularly in China, should return to the US, undertaking a so-called a “reshoring strategy.” The wisdom of such propositions, however, is open to debate.

MNCs in the News-2020 July

Chinese President Xi Jining courts foreign direct investment (FDI) in encouraging letter to the Global CEO Council. China plans to impose sanctions on United States (US) company Lockheed Martin because of the latter’s weapons sales to Taiwan. China’s new, strict cybersecurity laws and regulations have driven Morgan Stanley, a US investment banking firm, to block its interns in China from remotely accessing its virtual network. The recent border clash with China has increased the pressure on New Delhi to reduce the country’s dependence on Chinese solar goods. Various special interest groups have called for the US to sanction China’s CRRC after the US Pentagon labeled it as backed by the Chinese military, saying it represents a security threat. Despite calls for a boycott in the wake of India’s border clash with China, many are skeptical Chinese smartphones can be displaced from the India market. Japanese and British trade negotiators agree they will not require encryption keys or the localization of data. Japan’s Mizuho Financial Group faces growing shareholder pressure to stop financing coal projects. Japan helps Japanese companies move to Vietnam and also helps them shift production lines to Japan as well as various Southeast Asian countries. Myanmar gives three Japanese firms permission to build a mega-liquified natural gas power plant. Korea to spend billions to promote an innovation-based economy. European Union to restart review of the merger of Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries Holdings. Incheon Port Authority joins the United Nations Global Compact. The backlash against Huawei creates some openings for Samsung, though it is unclear if the Korean firm can exploit them.

MNCs in the News-2020 June

China Ministry of Commerce data shows respectable year-over-year inward foreign direct investment growth (FDI) in April and May, with some hoping for continued growth in the 2nd half of the year. China’s new development initiatives for its Western regions are not succeeding in attracting inward FDI (IFDI) for both business and political reasons. The China Securities Regulatory Commission will look to allow big Chinese commercial banks into investment banking so they can help China fend off the growing challenge from foreign investment banking firms. The United States (US) Pentagon has submitted a list of 20 Chinese companies with ties to China’s military that operate “‘directly or indirectly’” in the US. The Indian government bans almost 5 dozen mobile apps. India’s state government of Maharashtra freezes investment proposals from three Chinese businesses. Japan adds select medical fields to the list of areas requiring special FDI reviews. Japan moves to allocate funds to domestic firms so they have a greater chance to participate in the 5G wireless technology race. Japan’s Kirin Holding will commission an audit of its Burmese joint venture (JV) partner over allegations its JV channels funds to Myanmar’s military. Japan is contemplating Indonesian proposals that Japan participate in its Jakarta-Bandung high-speed rail which is delayed and overbudget. The Korean Communication Commission announces that Google will revise select YouTube subscription practices following a large fine and negative ruling. South Korea outward FDI, which favors North America, plunged dramatically in March. Potential for Doosan Heavy Industries & Construction to start its Indonesian Jawa Thermal Power Plant Construction Project increases after project based second feasibility study. US Presidential election increases pressure on Korean carmakers and tiremakers to invest more in the US.

Dr. Jean-Marc F. Blanchard's picture

Dancing while Watching the Clock: Tik Tok’s Woes in India

ByteDance is facing up to USD $6 billion in losses from the Indian government’s decision to ban almost five dozen Chinese mobile phone apps including its Tik Tok and Helo.

MNCs in the News-2020-04-24

According to China’s Ministry of Commerce (MOFCOM), more than 1000 companies including many from the United States (US), Germany, and Japan have registered from the 2020 November China International Import Expo. MOFCOM reports that China’s non-financial outward foreign direct investment (FDI) declined less than 1 percent year-over-year when compared to the 1st quarter of 2019. Many interpreted a recent India notification indicating special government scrutiny of FDI from bordering countries as directed against China as a time when Indian companies might be vulnerable. Canyon Bridge, the Chinese owner of the United Kingdom (UK)’s semiconductor designer Imagination Technologies, says the company’s headquarters will stay in the UK. Japan will add the medical sector to the list of sectors where FDI is subject to review pursuant to the Foreign Exchange and Foreign Trade Control Law. Japan’s NEC wins major deal to supply observation satellite to Vietnam. Korea’s Fair Trade Commission needs more time to review Delivery Hero’s deal to acquire Woowa Brothers due to concerns about the anti-competitive effects of the deal. Korea’s GS Engineering & Construction concludes a roughly $450 million deal with the Singapore’s Land Transport Authority to build an Integrated Train Testing Center.

Dr. Jean-Marc F. Blanchard's picture

De virus, Decoupling, De-globalization, Downsizing, and FDI in China

China’s coronavirus epidemic has had profound economic effects including dramatically reducing travel within and outside China, severely suppressing business activity in the education, entertainment, food & beverage, and leisure and recreation industries, among others, and disrupting or freezing manufacturing and the delivery of production i

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