Shanghai

Shanghai’s release of 100 policies seems to be drawing in foreign direct investment (FDI) in advanced manufacturing and benefitting foreign firms in remanufacturing. Google reportedly will launch censored search engine in China in 6-8 months. China’s National Development and Reform Commission lightens up restrictions on overseas borrowings by Chinese companies. Negative security review leads Yantai Taihai Group to drop plan to buy Germany’s Leifeld Metal Spinning AG. Japan, US, and Australia agree to invest in infrastructure projects in the Indo-Pacific in an apparent move to counter China. Japan seeks to cooperate with Moscow on construction of liquefied natural gas transfer hub in Russia’s Far East to minimize supply risks. Korean government to invest USD $1.3 trillion in 10-year next-generation semiconductor project to attract global semiconductor firms to set up plants in Korea. South Korea bolstering efforts to win bid for Saudi Arabia nuclear project after losing bid for United Kingdom construction project.

China’s State Council creates seven new free trade zones bringing the total number in the country to 11. China’s State Administration of Foreign Exchange (SAFE) pushes foreign businesses to support its efforts to limit capital outflows from China. Prior to Donald Trump-Xi Jinping meeting, Chinese parliamentarian links the quality of the meeting to Google’s prospects for entering China. European Union regulators approve China National Chemical Corporations (ChemChina)’s massive acquisition of Syngenta while requiring some significant divestitures. Trump administration considers some dramatic steps to keep Westinghouse’s nuclear business out of Chinese hands. Sibanye Gold Ltd.’s proposed investment in Stillwater mining may not be golden because of American concerns over strategic materials access. Iran-Japan Investment Treaty enters into force on April 26 and may spur Japanese energy investment in Iran. Japanese foreign acquisitions hit a new record of almost USD $100 billion in fiscal year 2016, but performance is dubious. South Korea’s installation of the THAAD system continues to affect adversely Sino-Korean economic relations and Korean businesses. The fallout between China and South Korea over THAAD contributes to South Korean car manufacturers reducing production in their Chinese factories. Consortium of Chinese and Indonesian companies signs contract launching the construction phase of the Jakarta-Bandung high-speed train project. Afghan President Ghani encourages Indonesian investors to invest in Afghanistan and stresses the security of foreign investors as a top government priority. Tier-one American aerospace manufacturer may invest in Malaysia stimulating business for small and medium enterprises and creating high-income jobs. India and Malaysia sign investment deals with a value of USD $36 billion. Belgium plans to ramp up green energy investment in Vietnam.

Foreign companies change “government” relations practices in China to adjust to the newfound role of the Communist Party. Boeing will work with Commercial Aircraft Corporation of China Ltd., a Chinese state-owned enterprise, to construct a Boeing 737 completion center near Shanghai. During his visit to China, Saudi Arabia’s King Salman signs agreements with a potential value in the tens of billions of dollars, many relating to the construction of petrochemical facilities in China. The head of the People’s Bank of China decries irrational investments in defending the government’s recent imposition of capital controls. Japan and Saudi Arabia agree to study the value of special economic zones as a means to attract Japanese companies to Saudi Arabia. Toshiba’s financial woes, relating to its troubled American Westinghouse unit, are raising all kinds of national security, job, and financial issues for the Japanese and American governments. Japan may use various economic laws to ensure Toshiba’s memory chip unit is not sold to a bidder that may represent a national security risk. Myanmar authorities give KB Kookmin Bank permission to establish a cooperative microfinance venture in the country. Doosan Heavy Industries & Construction Co. wins a USD $408 million deal to upgrade an existing Indonesian power plant. Indonesia runs major investment promotion event in Singapore. Indonesia Tourism Ministry courts Singaporean investment in North Sumatra airport and other infrastructure.

Inward foreign direct investment (FDI) in China shows growth over the previous month year over year (YOY) and for the first eight months of 2016 YOY. China’s State Council announces China will adopt a nationwide negative list by October 1. Chinese outward FDI (OFDI) dramatically jumps over first 8 months of 2016. Chinese OFDI (COFDI) surges dramatically over first eight months of 2016. British government surprise review of Hinkley Point C nuclear plant deal involving China General Nuclear Corporation (CGNC) results in approval. Chinese government and CGNC pleased by British decision on Hinkley Point C. China is major investor in Myanmar’s power sector. Peru’s President expresses concerns about the financial viability and environmental consequences of a Chinese-proposed transcontinental railway from Brazil to Peru. Brexit may drive some political realignments between Japan and Britain, though Japanese companies await developments. GM Korea President James Kim calls for an end to worker strikes and warns of adverse consequences for GM Korea. Korean Fintech firms will push the Korean Fair Trade Commission to force Apple to open its APIs for near field communication. Following high level leader summit, Korean firms win many deals in Russia. Indonesia tax amnesty fails to produce anticipated results. Indonesian minister’s proposal to soften 2009 Mining Law draws fire. Thailand reports the Sino-Thai high-speed rail initiative is chugging forward.

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.