One Belt

MNCs in the News-2016-06-17

China’s inward foreign direct investment (IFDI) shows a slight decline in May year-over-year (YOY), though the figures for the first five months of 2016 showed a moderate increase (YOY). Chinese Premier Li Keqiang tells German officials and executives that China plans to improve the investment environment for them as well as others. In China, German Chancellor Angela Merkel calls for independent judiciary and level playing field for foreign firms. XpressWest unilaterally terminates its contract with China Railway International for the construction of a high-speed railway linking Las Vegas and Los Angeles. China National Chemical Corp. (ChemChina) resubmits its Syngenta deal to the Committee on Foreign Investments in the U.S. for national security review. South Korean investigators descend on Lotte Group in connection with allegations of a slush fund. Korea and Azerbaijan agree to expand economic cooperation in areas like investment and infrastructure. South Korea plans to reform government-run energy companies to improve their financial soundness and operating efficiency. Indonesia and Japanese oil giant Inpex reach a deal on the multi-billion dollar Masela onshore liquefied natural gas (LNG) plant which may bring more new opportunities for Japanese business to invest in Indonesia. Japanese firms look very favorably upon Vietnam as an investment destination.

MNCs in the News-2016-04-22

China’s Ministry of Commerce underscores reasons to be optimistic about inward foreign direct investment flows into China. China experiences a massive creation of foreign-funded enterprises between 2011 and 2015. China’s National Development and Reform Commission will test a “negative list” approach in Fujian, Guangdong, Shanghai, and Tianjin. The American Chamber of Commerce in China expresses concern about China’s policies and what it sees as a lack of serious commitment to reform. In testimony before Congress, Apple denies that it had provided iPhone source code to China. Chinese anti-trust investigators now seem to be turning their attention to Korean firms after targeting German and Japanese firms. China’s Chinese outward foreign direct investment (COFDI) and M&A deals show significant growth in the first quarter of 2016. EY forecasts strong Chinese outward FDI growth averaging 10 percent partly because of the One Belt, One Road program. South Korea’s Fair Trade Commission reports it succeeded in getting Apple to revise the problematic Authorized Service Agreement it had concluded with six Korean repair service providers. Government data indicates the Korea-China Free Trade Agreement is stimulating COFDI into Korea. Indonesia’s President Joko "Jokowi" Widodo will visit four European countries to promote European investment in Indonesia. Denmark concludes Memorandum of Understanding with Indonesia involving capital and technology in exchange for land. Experts call for Vietnam to be more selective in granting tax incentives to foreign investors and encourage it to strengthen its FDI management capabilities. Myanmar grants a license to Vietnam’s military-run Telecommunications Group (Viettel) to build a multi-billion dollar telecommunications network.

MNCs in the News-2016-04-01

Chinese Premier Li Keqiang emphasizes China’s willingness to work harder to create a favorable environment for foreign investors. China’s Ministry of Industry and Information Technology stresses that the country’s planned rules on Internet domain names will not affect companies’ “normal operations.” China will set up its first overseas permanent military base in Djibouti. China’s Railway Rolling Stock Corp. aims to win large amounts of business in the developed world. In the face of US Senatorial concerns, Syngenta AG insists a China National Chemical Corp. takeover would not raise security issues. Japan may finance a multi-billion dollar deep-sea port project in Patimban, Indonesia. JR Tokai and its American partner Texas Central Partners (TCP) are going to ask the US Federal Railroad Administration to set new rules allowing an ultrahigh-speed to be built to Japanese bullet train specifications. Mercedes-Benz Korea not rolling along as far as the Korean government is concerned. The Korea Trade-Investment Promotion probes if Korean companies should relocate from the shuttered Kaesong Industrial Complex to Vietnam. Korean businesses and association, in collaboration with the government, will establish a public-private consultative council to boost overseas Korean construction business. Thai Democrats challenge financing model for Bangkok to Nakhon Ratchasima high-speed train line. Vietnamese inward foreign direct investment for the first quarter of 2016 surges over the comparable period a year earlier.

Dr. Amitendu Palit's picture

Growing Doubts about China’s Capacity to Finance Overseas Projects and their Political Implications

Dr. Amitendu Palit
Posted: Feb 15, 2016

China’s foreign exchange reserves have been declining in recent months with the surge in capital outflows and the People’s Bank of China (PBOC)’s efforts to protect the Yuan from depreciating. At US $3.2 trillion, China still holds the world’s largest foreign exchange reserves.

MNCs in the News-2016-02-05

Shanghai’s Jiading People’s Court imposed fines and jail terms on OSI China for 2014 safety scandal. China’s General Administration of Quality Supervision, Inspection, and Quarantine orders Volkswagen to recall defective cars. Chinese outward foreign direct investment (FDI) shows no meaningful adverse impact from Chinese efforts to control capital outflows. China rejects media reports that the China-Indonesia high-speed railway project connecting Jakarta with Bandung has been suspended. COSCO looks to win bids for port contracts in Cyprus. Yahoo Japan besieged by criticism about its efforts to deal with the sale of illegal ivory on its website. Japan and Iran conclude investment pact. Korea’s Fair Trade Commission (FTC) fines Lotte founder and Lotte subsidiaries for false and incomplete reporting of ownership stakes and structures. Korea Water Resources Corporation to partner with Asian Development Bank to limit water waste and improve resource management. Indonesia’s Telekomunikasi blocks Netflix. Indonesia moves to remove barriers hindering infrastructure projects. Indonesia religious group calls for additional study of Jakarta-Bandung high speed rail. Japanese investors encourage Thailand to join the TPP, saying it will have positive investment effects. Vietnam’s Foreign Investment Agency reports positive figures in January for investment growth and disbursements.

MNCs in the News-2016-01-01

China’s Central Economic Work Conference promises to “‘give equal treatment to domestic and foreign companies.’” China’s National People’s Congress approves counter terrorism law that worries foreign businesses and governments. China’s State Council issues guideline designed to enhance IPR protection. China’s National Development and Reform Commission (NDRC) issues a draft of its first “Anti-Monopoly Guidelines on Abuse of Intellectual Property Rights” for public comment. China’s NDRC fines eight international sea freight shipping companies for price fixing. China’s People’s Bank of China suspends three foreign banks from certain kinds of foreign currency activities. Analysts expect Chinese outward investments to reach new heights in 2016. China’s nuclear power firms hope Hinkley Point project will be a stepping stone to new deals abroad. China and Pakistan finalize financing agreement for massive Thar Coalfield development project. Iraqi Prime Minister courts Chinese investment and railway cooperation during his first visit to China. Japan competes vigorously against China in battle to sell high-speed rail overseas. Inward FDI into Korea hits new high in 2015. At the end of December, Korea announced it would impose a Google tax on foreign companies. Hyundai Development Company wins $85.4 million bridge and road construction contract in Vietnam. Samsung Engineering lands another major engineering contract from Mexico’s PEMEX. The Association of Southeast Asian Nations Economic Community is expected to boost franchise businesses in Indonesia. Indonesia is hopeful that a Comprehensive Economic Partnership Agreement (CEPA) with the European Union (EU) will boost EU IFDI. Indonesian will increase incentives to boost investment in oil refineries. Thailand expects IFDI to meet its targets in 2016. China and Thailand hold ceremony to launch joint rail project, though disagreements exist which may delay the project’s start date. Malaysia touts the benefits of its Principal Hub scheme. Chinese group negotiating with Malaysian firms in order to position itself for a bid on Malaysia-Singapore high-speed rail. Experts feel recent free trade agreements will boost investment in Vietnam. Vietnam expects US FDI flows into Vietnam to increase significantly, though obstacles remain.

MNCs in the News-2015-12-04

China’s General Administration of Quality, Supervision, Inspection, and Quarantine announces recall of more than 10,000 Mercedes cars due to airbag defects. China moves to develop “Made in China” drugs. China’s rising overseas economic presence reflected in its negotiations with Djibouti to build a logistics hub. Top Chinese Ministry of Commerce (MOFCOM) leader highlights potential for further Chinese investment in Africa. At the latest China-Africa Cooperation Summit, Xi Jinping oversees expansion of Chinese economic cooperation with South Africa and other African countries. Ambitious $50 billion Nicaragua canal plan delayed by at least one year, intensifying doubts about its viability. Sino-Russian joint venture (JV) set up to build rail equipment for Moscow-Kazan high-speed rail line. Xiamen University to invest in campus in Malaysia that will support the One Belt, One Road (OBOR) initiative. Bank of China facing $50,000/day fine under US District Court contempt order. Nissan moves to limit French government and Renault interference in Nissan-Renault alliance. Japan agrees to provide funding to Indonesia for various mass transit and power projects. Japanese firm lands power deals with Botswana. British firms eager to exploit public-private partnership opportunities in Thailand. Thai Prime Minister emphasizes need for Thai-China railway to move forward. Indonesian government seems reluctant to start early negotiations with Freeport-McMoRan about the Grasberg mine. Vietnam reports significant increase in foreign direct investment inflows up to November 2015.

MNCs in the News-2015-10-16

Inward foreign direct investment (FDI) flows into China grew 7.1 percent in September over the prior year. China’s National Development Reform Commission expects to produce first draft of antirust guidelines for the automobile sector by the end of October. China’s State Administration of Taxation moves forward with plan to deal with tax avoidance issues such as transfer pricing. Google reported activates Google Maps and Google Earth on and moves servers to the Chinese mainland. IBM to allow China to view its security codes in a clean room to assuage Chinese concerns about foreign technology. Chinese OFDI continues to show strength, especially along One Belt, One Road. Russian subnational units court Chinese investment. Dakang New Zealand pulls out of massive dairy investment in New Zealand blaming regulatory obstacles. Chinese anticorruption authorities move against Sam Pa as part of investigation of Su Shulin and Sinopec. Japan works with Iran to bolster its investment opportunities in the country. Korea’s Trade-Investment Promotion Agency holds job fair to help young Korean jobseekers land positions with foreign companies in Korea and abroad. Starbucks Coffee Korea brews up a new mix of programs to give back to the community in Korea. Korean firms score well in winning packages to build a massive oil refinery in Kuwait. Freeport favors IPO divestment method to satiate Indonesian government requirements for ownership stake reallocation.

MNCs in the News-2015-09-18

China and the US step up negotiations on a bilateral investment treaty (BIT). US companies face intensification of pressures to accommodate Chinese government’s information technology security anxieties. US backs off imposing sanctions against Chinese companies benefitting from commercial hacking activities. China’s General Administration of Quality Supervision, Inspections, and Quarantine tells FAW-Volkswagen to do more in regards to Sagitar defect. Chinese outward foreign direct investment (FDI) registers impressive growth in first eight months of 2015 and all of 2014 with One Belt, One Road (OBOR) investment continuing to soar. Lenovo is working to ensure its server products can be purchased by US government agencies. China will help set up infrastructure to promote China-ASEAN internet connectivity and the 21st Century Maritime Silk Road. Japan’s Kayaba Industries Co. pleads guilty to price fixing scheme and accepts large fine. Korea’s National Tax Service undertakes tax audit of Mercedes-Benz Korea. Korean government pushes foreign businesses to hire more workers, especially young workers. Indonesia is moving to implement incentives to boost foreign investment in refinery operations. Vietnam takes heed of complaints of Korean business community.

MNCs in the News-2015-08-28

China dials up new leadership at its telecommunications giants. Tsinghua Unigroup attempts to chip away at opposition to its purchase of Micron Technology. China investors see stable investment returns on offer in the UK. China’s Yunnan province pushes infrastructure construction to support the One Belt, One Road (OBOR) and other initiatives. Alibaba given 6-month extension to operate in Taiwan while Taiwan appellate body review its case. Japan strives to strengthen its medical and pharmaceutical firms. Japan and Mekong River nations adopt “Mekong Industrial Development Vision.” Japan and China competition to build high-speed railway in Indonesia reaches its final stages. Korea touts its advantages and pursues new policies in order to double inward foreign direct investment (FDI). Korea orders recalls of select Ferrari cars, Harley Davidson motorcycles, and Volvo trucks due to various defects. Toyota puts the brakes on Prius production in Thailand due to tariff dispute. Foreign business leaders in Thailand believe Erawan Shrine bombing will not influence FDI inflows. Investors express complain about the vagueness of Vietnam’s new foreign investment guide.

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