infrastructure

MNCs in the News-2021-September

China Ministry of Commerce (MOFCOM) looking at negative list for cross-border services trade in the country’s free trade zones (FTZs). China’s Ministry of Industry and Information Technology publishes draft regulations relating to the classification of data and data export restrictions. American Chamber of Commerce in Shanghai indicates members doing well in China, optimistic about their revenue prospects, and have little intention to move outside of China. High-level Chinese official says Pakistan needs to provide high-level security assurances for China-Pakistan Economic Corridor (CPEC). Chinese outward foreign direct investment (FDI) flows into India severely constrained by bilateral tensions, though some Chinese mobile apps have found new ways to resume operations. COSCO Shipping Ports, to acquire a 35 percent stake in container terminal at the Port of Hamburg. To settle a Japan Fair Trade Commission investigation, Apple modifies the payment policies for some App Store apps. Japan protests South Korean court order forcing Mitsubishi Heavy Industries Ltd. (MHI) to sell assets to provide compensation for wartime forced labor. Samsung calls upon United States (US) to increase tax incentives for its semiconductor FDI in the US. European Commission representative travels to Korea to encourage Korean semiconductor markets to establish operations in the European Union. US Department of Commerce demands confidential business information from Korean chipmakers because of concerns about automobile sector chip shortages. China’s measures to limit online gaming time for young gamers have potentially big longer-term implications for Korean gaming companies.

MNCs in the News-2021-August

China’s utilized inward foreign direct investment (FDI) showed solid growth over the first seven months of 2021 compared to the prior year period. China’s Ministry of Commerce (MOFCOM) is working to develop an improved negative list for 2021. China’s MOFCOM orchestrates site visits for foreign Chambers of Commerce, industry associations, and businesses in Xinjiang. China’s outward FDI (OFDI) to Belt and Road Initiative (BRI) countries shows solid growth for the first seven months of 2021 year-over-year (YOY), though China’s total nonfinancial OFDI growth rate was negative YOY. India’s massive infrastructure plans attract the cautious interest of Chinese companies and investors. Chinese companies hope regime change in Afghanistan will lead to improved security and stability that facilitates restarting investment and infrastructure projects and initiating new ones. The Japanese government moves to implement a law limiting FDI or activities in sensitive areas such as near military installations or critical infrastructure. Japan’s Kirin Holdings has no intention to exit Myanmar despite the political turmoil that has flowed the military coup there. South Korea moves towards the approval of a law that will limit the ability of firms like Google and Apple for force software developers to use their payment systems on in-app purchases. Korea levies fines and penalty surcharges against Facebook and Netflix for improper data collection, disclosure, and/or cross-border data transfer practices.

Dr. Jean-Marc F. Blanchard's picture

Finding Greatness in China’s Greater Bay Area (GBA), part I: Diving into the Bay

Possessing about a decade-long lineage, China’s Greater Bay Area (GBA) formally began in 2017 with the signing of a Framework Agreement between the People’s Republic of China (PRC) and the Hong Kong Special Administrative Region. The objective is to create a mega economic cluster, involving 11 cities (e.g., Guangzhou, Dongguan, Hong Kong, Macao, and Shenzhen) that will be a leading international financial hub, a major global innovation center, a critical node between China and Southeast Asia, a world-class research center in fields such as biotechnology, and, more recently, a major link to China’s ambitious Belt and Road Initiative (BRI).

MNCs in the News-2021-July

China’s Ministry of Commerce (MOFCOM) reports strong inward foreign direct investment (FDI) growth over the first half of 2021 relative to 2020. China MOFCOM spokesperson assures foreign investors that China’s national security review process for FDI will be done selectively and carefully and that China is still open. Ericsson says declining results in China affected by Swedish government’s decision to ban Huawei and ZTE from its 5G network. Reduced outward FDI (OFDI) activity by Chinese firms for various reasons including Covid is dramatically reducing their foreign currency-denominated borrowings. The United Kingdom is reconsidering the involvement of Chinese state-owned enterprise (SOE) China General Nuclear in two British nuclear power plants. Chinese President Xi Jinping highlights Belt and Road Initiative in conversations with leaders from Ukraine, Turkey, and Barbados. Japanese OFDI deal counts and volumes show notable increase in the 2nd quarter of 2021. Japanese government moves as well as the risk of boycotts and investment divestitures drive Japanese textile industry to work to purge its supply chain from human rights abuses. In the face of a social media backlash and the risk of a boycott, Japan’s Toyota once again ceases PAC donations to members of the United States (US) Congress that denied the legitimacy of the 2020 US Presidential election. Korea’s Minister for Science and ICT supports tax on overseas platform companies while warning of potential overseas taxes on Korean companies. Korea paying increasing attention to country’s OFDI flows, with some worrying it might lead to deindustrialization and unemployment.

Dr. Jean-Marc F. Blanchard's picture

The Digital Silk Road, part II-Dialing Down the Hyperbole

My last blog supplied a basic overview of China’s Digital Silk Road (DSR) initiative, part of its larger Belt and Road Initiative (BRI). This blog represents a first cut at detailing the DSR. Unfortunately, as with the BRI, it is quite challenging to do so well. Reasons include the non-existence of a public, official list of DSR projects, the misclassification of technology-related foreign direct investment (FDI) in areas such as smartphone manufacturing and semiconductor packing and testing operations as DSR-space FDI even though they have nothing to do with connectivity, and the unwillingness of participant countries to disclose the terms of their contracting deals with China.

Dr. Jean-Marc F. Blanchard's picture

Circling around China’s Dual Circulation Policy, part III-Implications for China’s Outward FDI

This piece complements two earlier pieces that, respectively, overviewed China’s Dual Circulation System (DSC) and pondered its implications for inward foreign direct investment (FDI) into China. It specifically focuses on the potential ramifications of the DCS for Chinese outward FDI (OFDI). Prima facie one logically might expect the DCS to moderate Chinese OFDI since its goals include inter alia enhancing China’s indigenous capabilities, insulating China from an occasionally hostile external environment, and increasing domestic consumption and production. In actuality, though, these and other DCS aims do not support the premise the DCS will result in Chinese money shunning the outside world.

Dr. Jean-Marc F. Blanchard's picture

Circling around China’s Dual Circulation Policy, part II-Implications for Inward FDI

In my December blog, I overviewed China’s Dual Circulation System (DCS). To reiterate, foreign multinational corporations (MNCs) are concerned about the DCS’s emphasis on self-sufficiency, indigenous technology, and insulating China against the international market’s vagaries. Foreign MNCs, though, also see opportunities to satiate anticipated growth in domestic demand and the needs of a presumptively wealthier population, facilitate China’s efforts to promote high-quality development through inter alia the provision of “technology-focused products and services” (as one Michelin China CEO put it), and to supply the materials needed for China’s ramped up domestic infrastructure and production.

Executive Director Jean-Marc F. Blanchard participates in Middle East Institute report on China and the Black Sea

Dr. Jean-Marc F. Blanchard, Founding Executive Director of the Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations (Wong MNC Center), was invited to participate in an ambitious Middle East Institute (MEI) Frontier Europe Initiative report on China in the Black Sea region, which focused on China's expanded role in the region in the context of its mega Belt and Road Initiative.

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.

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.

Pages