OBOR

China State Council meeting decides to pursue numerous measures to increase foreign direct investment (FDI) flows as well as the realization of major FDI projects. Rising United States (US)’ tariffs are driving Asian firms to leave or contemplate departing China for other places in the region. Despite pressures, China Ministry of Commerce (MOFCOM) official notes Chinese outward FDI (OFDI) is to be expected and Beijing will encourage firms with ‘good reputation’ and ‘strength’ to invest. Per MOFCOM the profits of Chinese companies overseas hit USD $137.8 billion in 2017, a 52 percent jump year-over-year (YOY). The Japan Overseas Infrastructure Investment Corp. for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation will invest $300 million in the $16 billion Texas high-speed rail project. Seeing shifting trade patterns due to China’s Belt and Road Initiative (BRI) and the US-China trade war, Japan’s Nippon Express will seek to expand its shipments on Chinese rail companies. South Korea’s Daewoo to cooperate with state-owned Korean enterprises and other firms to bid on massive nuclear power projects in the Czech Republic and Poland. South Korea and Chile look to build up their infrastructure cooperation.

BMW and Tesla roll forward in China as government paves the road to greater ownership stakes. Foreign financial institutions banking on increasing role in China’s Belt and Road Initiative (BRI). Cambodia’s Minister of Agriculture, Forestry, and Fisheries opined that Chinese outward foreign direct investment (FDI) in Cambodia’s agricultural sector was bearing substantial fruit for his country. Sumitomo hopes to use agreements with Japanese local government to entice Japanese manufacturers to use rental plant areas at its Vietnamese industrial parks. Takeda optimistic about getting China’s sign-off for USD $62 billion Shire acquisition deal despite concerns of Chinese retaliation over US tariffs. LG Chem plans new battery plant in Nanjing to take advantage of the Chinese government’s electric car incentives, which are expected to disappear by 2020. New investment wave expected to hit Vietnam’s textile and garment industry boosted by Vietnam-South Korea FTA.

Apple denies taking a bite out of its customers. Official Chinese data indicate that Chinese outward foreign direct investment (FDI) grew healthily in the 1st quarter of 2018. China Three Gorges charges up to take full control of Portugal’s EDP which is drawing political scrutiny. Chinese investment in Malaysia big election issue. British government proposes USD $18.2 billion in loans for Hitachi’s Wales nuclear plant. Uniqlo to enter Indian market in fall 2019 as Indian government initiatives attract foreign retailers to the country. General Motors to move Asia-Pacific headquarters to South Korea to show Seoul commitment to its revitalized Korean operations. Elliot seeking legal action against Korean government for USD $670 million it claims to have lost from merger of two Samsung affiliates. Mahathir says Malaysia may renegotiate some deals with China following his coalition’s victory.

China to roll out new negative lists for free-trade zones (FTZs) and other parts of the country during the first half of 2018. Foreign and publicly-listed on foreign exchanges Chinese firms move to accommodate Chinese Communist Party (CCP)’s desire for greater say. China’s Ministry of Commerce (MOFCOM) touts that Chinese outward foreign direct investment (FDI) grew while Chinese outward FDI in irrational areas has collapsed. Chinese investors pour money into American bio-tech firms for a variety of financial, political, and social policy reasons. Indonesia to rely on loans from Japanese government and public-private partnership schemes to fund USD $4.5 billion railway project. Honda experiencing complications with its CR-V recall plan in China as sales continue to drop. Seoul offers to give American carmaker General Motors USD $470 million to continue its Korean operations as bankruptcy looms. Multinational companies operating in South Korea increasingly under government scrutiny for malpractice. AIIB very interested in financing Malaysian infrastructure projects following a meeting between the AIIB President and Malaysia’s Prime Minister. Japan’s Nichirei Corp acquires 40 percent stake in Malaysia’s state-owned Cold Chain Network which facilitates the latter’s effort to address government development objectives.

US companies dilute proposed legislation that might have dampened their exports to/sales in China of technology. 2018 China Enterprise Cross-Border M&A Special Report shows decline in both the number and volume of Chinese merger and acquisition (M&A) deals in 2017. China’s crackdown on CEFC Energy throws into uncertainty a proposed mega investment in Russia’s Rosneft. Japanese may loosen regulations on foreign direct investment (FDI) in Japanese broadcasters. Toshiba chip sale deal awaits regulatory approval from China. South Korea company wins multi-billion bridge building contract in Turkey. South Korea and Russian companies lay foundation for cooperation in building transportation and other infrastructure for Korean peninsula and elsewhere. Indonesia’s Environment and Forestry Ministry to sue American mining company Freeport McMoRan for massive environmental damages. Indonesian official embark on road show to bring more private FDI into the country’s underfunded infrastructure projects. Thai government alarms by announcing intention to change the country’s Foreign Business Act. Malaysia finalizes deal bringing USD $7 billion of Saudi FDI into the Pengerang Integrated Complex. UAE company will pour more than USD $1 billion to develop offshore Malaysian gas site. Vietnam’s State Audit Office slaps back taxes bill on just privatized former state-owned enterprises (SOE) Sabeco. Vietnam aims to divest major portion of PetroVietnam Gas to garner strategic investment and massive amounts of funds.