JPMorgan

Dr. Jean-Marc F. Blanchard's picture

Run Bank Run? The Deposits Foreign Financial Firms Made in China Market (Still) are Not Liabilities

How fast sentiments can change! The much vaunted opening of China’s financial sector to foreign banking, insurance, and securities firms has become a source of angst with observers now wondering if foreign financial players such as Allianz, Citigroup, JPMorgan, Nomura, and UBS will get caught up, directly or indirectly, in China-United States (US) tensions relating to geopolitics, trade, foreign direct investment (FDI), portfolio investment, Covid-19, and the changed status of Hong Kong. Potentially at risk are billions of dollars in FDI such companies have spent to acquire majority stakes in or establish securities joint ventures (JVs), build up their China insurance operations, and begin mutual fund operations.

MNCs in the News-2020-04-10

United States (US) financial giant JPMorgan strikes terms for taking 100 percent stake in its Shanghai mutual fund joint venture (JV). US trade bodies write to US Department of Commerce head to warn about adverse effects of contemplated changes to US export controls of semiconductors and semiconductor equipment to China, stressing for the first time the importance of chips in healthcare equipment. Reported attempted Board coup at United Kingdom (UK) graphic chipmaker Imagination Technologies blocked by UK government. China rejects reported charge that it was donating masks to France on the condition Huawei could participate in France’s 5G network. Japan prepares massive supplemental budget to facilitate Japanese firms leaving China for Japan or Southeast Asia. Indonesia’s partial lockdown in Jakarta drives Japanese firms to temporary shutter their factories there. Korean regulatory authorities will conduct a comprehensive review of Germany’s Delivery Hero’s acquisition of Woowa Brothers, the operator of food delivery app Baemin. India’s Mahindra & Mahindra says it will not inject fresh funding into SsangYong Motor.

MNCs in the News-2020-03-20

China’s National Development and Reform Commission (NDRC) notes China will strive to help foreign businesses resume normal operations, will shorten the negative list for foreign direct investment (FDI), and will advance major foreign-invested projects. Shanghai city government highlights that major foreign financial firms continue to inject FDI into the brokerage, asset management, and securities sectors, among others, despite the Covid-19 epidemic. China State Construction Engineering Corporation places first tower cap in mega skyscraper project for Egypt’s new administrative capital, part of the Belt and Road Initiative. Japan’s Ministry of Finance starts to solicit public comment on future revisions to the Foreign Exchange and Foreign Trade Act. List of Japanese companies suspending operations at factories in the United States (US) due to coronavirus grows. Korea Rail Network Authority (KRNA) wins a bid from Thailand to manage a high-speed railway linking three airports. Hyundai Rotem, a subsidiary of Korea’s Hyundai Motor Group, ordered by Brazil’s Ministry of Labor to pay large fine plus moneys due workers for failing to pay workers overtime pay.

MNCs in the News-2020-02-14

JPMorgan (China) intends to assume full ownership of all its mainland China operations by 2021 to take advantage of China’s financial sector opening. Chinese regulators approve United States (US) credit card firm Mastercard Inc.’s application to establish a bankcard clearing house joint venture. Peter Navarro urges the US to reduce its reliance on Chinese pharmaceutical and medical supplies. New US regulations expanding the authority of the Committee on Foreign Investment in the United States (CFIUS) with respect to the review of foreign direct investment (FDI) have gone into effect, with notable implications for Chinese FDI in the US. Coronavirus impact on supply chains and production in China accelerates move already occurring because of US-China trade war and rising labor costs in China. Japan is excluded from list of countries exempted from new CFIUS review ambit, but this may change. Merger of Korean shipbuilding giants potentially affected by Japanese filing of World Trade Organization petition, charging illegal subsidies. Korea’s SK Engineering & Construction wins mega-deal to build a beltway in Kazakhstan.