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MNCs in the News-2019-06-28

President Donald Trump’s tough stance on intellectual property rights (IPR) violations seems to be driving China to treat foreign IPR more respectfully. At the Osaka G20 Summit, Chinese President Xi Jinping announces several measures China will undertake to open its market further to foreign direct investment (FDI) and improve IPR protection. This past week witnessed the creation of the Belt and Road Economic Information Partnership (BREIP). Two major BRI projects in Africa end. At the Osaka G20 summit, participating countries embrace Japan’s international principles for quality infrastructure. Japan tells two leading candidates for the British Prime Ministership it does not want a “no deal Brexit.” As part of its downstream growth and diversification strategy, Saudi Aramco and its affiliates have signed a dozen accords with South Korean companies covering sectors areas like shipbuilding, engine manufacturing, and petrochemicals. A consortium involving Korea Hydro & Nuclear Power (KNHP) and KEPCO Plant Service & Engineering (KPS) signs a five-year maintenance service deal for the Barakah nuclear power plant, but fails to garner responsibilities for maintenance services, nuclear scientists, and engineers.

MNCs in the News-2019-05-24

China’s Cyberspace Administration releases draft document stating, “operators of the country’s critical information infrastructure…will be required to take into account national security risk when purchasing foreign products and services.” A recent European Union (EU) Chamber of Commerce in China survey suggests the problem of forced technology transfers in China has worsened. The US is considering cutting off the flow of American technology to five other Chinese firms putatively because of these companies’ role in supporting Beijing’s actions in Xinjiang. With the United Arab Emirates (UAE) aiming to become a major China’s Belt and Road Initiative (BRI) partner, China’s East Hope Group conglomerate contemplates $10 billion port investment there. China’s chargé d'affaires in London warns if Huawei banned from Britain’s 5G network there might be “substantial” repercussions for Chinese foreign direct investment (FDI) in the United Kingdom (UK). The Japan unit of US e-commerce giant Amazon has decided to stop direct sales of all Huawei products through its online store. Mizuho Financial Group Inc. said it will tighten standards for lending to coal-fired power plants with high emissions of CO2. Renault Samsung workers in Korea reject draft wage and bargaining agreement which may lead to an “indefinite all-out strike” that drives the joint venture’s upcoming XM3 production to Spain. Iraq’s Ministry of Petroleum awards Korea’s Hyundai Engineering and Construction a $2.45 billion contract to build a seawater supply facility in Iraq.

MNCs in the News-2019-04-26

United States (US) Trade Representative (USTR) criticizes China’s intellectual property (IP) protections and calls for stronger IP safeguards. China pledges the journey along its Belt and Road (BRI) will only get better. Survey shows new European Union (EU) foreign direct investment (FDI) screening laws make Chinese companies feel the EU is discriminating against them. United Kingdom (UK) reportedly dials into China’s Huawei participating in its 5G network activities. Eager to keep Italy from moving too close to Beijing, Japan calls for deeper economic (and military) cooperation during top leader summit. Korea charged up about lack of level playing field relating to electric vehicle subsidies. Korean petrochemical firms will be hit by the upcoming end to the US policy of granting waivers to countries importing Iranian crude oil.

MNCs in the News-2018-12-14

Inward foreign direct investment (FDI) into China for the first 11 months of 2018 year-over-year relatively stable. Beijing stops requiring its local governments to support the Made in China 2025 policy. European Union Ambassador to China calls on China to stop requiring companies to transfer technology for market access. Apple considers moving some production out of China due to possibility of increased tariffs on its China-produced smartphones and laptops. 2018 proves a tough year for Chinese outward FDI (OFDI) in the oil sector. Huawei accepts various UK technical requirements “to address risks in its equipment and software.” Following a Japanese government’s decision that effectively excluded China’s Huawei Technologies Co. and ZTE Corp. from public procurement, Japan’s three major mobile phone carriers Softbank Corp., NTT Docomo Inc., and KDDI Corp. plan to stop using various products from these companies. Japanese expert panel calls on Tokyo to take measures to protect the usage of consumer data. Korea Electric Power Corp. report on Northeast Asia power grid notes it would face serious challenges because of sanctions on North Korea. Beginning July 2019, Korea will impose a value-added tax on a wider range of services provided by global technology giants to level the playing field for Korean firms.

MNCs in the News-2018-12-07

China says will lift all barriers to foreign direct investment (FDI) not included on the negative list and launch a special inspection to ensure foreign investors are treated fairly. China is advancing its promise to open its financial sector as evidenced by its approval of Swiss UBS Group’s control of a local joint venture (JV). Tesla has opened the bidding to build its “gigafactory” in Shanghai that will help it avoid Chinese tariffs on imported US-built cars. Sensitive to rising national security concerns, British telecom firm BT Group has blocked Huawei from supplying equipment for its core 5G technology. Diverging from other countries, Portugal allowed its major network provider to sign a contract with Huawei. Japan and Mitsubishi Heavy Industries Ltd. are contemplating abandoning a nuclear project in Turkey due to ballooning costs. Tokyo will issue guidelines for the acquisition of telecommunications equipment by central government ministries and the Self-Defense Forces that implicitly relate to Chinese makers. South Korean and Chinese officials hold investment promotion meeting in Beijing to seek ways to lower trade barriers and boost bilateral investment. Korean delegations makes urgent visit to the United Arab Emirates to dispel worries of Korea’s possible loss of the exclusive right to operate the Barakah nuclear power plant.

MNCs in the News-2018-11-16

China’s Ministry of Commerce (MOFCOM) reported October inward foreign direct investment (FDI) flows reflected a 7.3 percent rise over the previous year. MOFCOM looks to aid Chinese private companies invest overseas albeit in an “orderly,” guided way. German officials are pressing their government to hang up on Chinese corporate participation in the country’s early 2019 5G spectrum auction. American Enterprise Institute report suggests Belt and Road Initiative investment by Chinese companies is losing steam. Tokyo reassures Japanese businesses of its opposition to any actions requiring Japanese companies to pay compensation to forced laborers, saying the matter was settled in 1965. Japan succeeds in getting member countries of the Asia-Pacific Economic Cooperation (APEC) forum to adopt new guidelines relating to the quality of infrastructure development and investment. Korean price rigging conspiracy at US military bases in Korea fuels massive USD $200 million in criminal and civil penalties. South Korean legislatures considers broadened value-added tax on global information and communication technology companies to create a level playing field for Korean firms.

MNCs in the News-2018-09-28

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.

Dr. Jean-Marc F. Blanchard's picture

Slow and Steady Wins the Race? Pondering the Japanese Corporate Reaction to Brexit

In 2016, the United Kingdom (UK) voted to leave the European Union (EU). “Brexit” fueled considerable anxieties in the Japanese business world, which is the second largest source of foreign direct investment (FDI) in the UK. This was hardly shocking given the latter’s extensive involvement in the UK.

MNCs in the News-2018-09-07

International Monetary Fund (IMF) calls China’s investment and service trade environment “very restrictive.” US tariffs and environmental rules severely constrain Chinese firms, creating space for Japanese chemical firms. Muji pondering moving HQ from the United Kingdom (UK) due to tax and trade complications flowing from Brexit. New South Korea government penalty scheme relating to recalled vehicles following BMW’s massive recall raises trade secret loss anxieties among South Korean firms. Meeting between high-ranking Hyundai official and Indian Prime Minister Moti leads Hyundai to promise a leading role in helping develop India’s electric vehicle industry.

MNCs in the News-2018-08-17

China’s Ministry of Commerce (MOFCOM) reported that inward foreign direct investment (FDI) over the first seven months of 2018 grew 5.5 percent year-over-year (YOY) with strong growth in inward FDI (IFDI) in high-tech industries. MOFCOM noted that there was major growth in IFDI from countries such as the United Kingdom (UK), South Korea, and Japan over the first seven months of 2018 YOY. Hundreds of Google employees raise concerns internally about the firm’s plans to produce a censored search engine for China. China National Petroleum Corporation (CNPC) takes over Total’s stake in Iran’s South Pars Phase II project as Total must abandon it due to re-imposition of United States (US) sanctions. Japanese regulators investigating Apple over allegations that it unfairly pressured Yahoo Japan to slow the expansion of online games platform. Japan makes economic cooperation with the Indo-Pacific region a diplomatic priority in attempt to counter China’s Belt and Road Initiative. South Korea places ban on over 20,000 BMWs after more than 30 engines caught fire this year due to faulty hardware. South Korean Prime Minister calls for increased cooperation with Qatar especially in infrastructure projects.

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