WTO

MNCs in the News-2019-07-12

Inward foreign direct investment (FDI) flows into China continue to grow, especially in the high-tech sector. Chinese Ministry of Commerce (MOFCOM) official states that Inward FDI (IFDI) is not leaving China en masse and that China will “protect the legitimate rights and interests of foreign investors.” Chinese outward FDI (OFDI) to Europe and North America over the first six months of 2019 shows a noticeable decrease over the same period the prior year. Despite a spying incident and Poland’s President saying he was opposed to Chinese OFDI (COFDI) in strategic infrastructure, Poland’s Foreign Minister told visiting Chinese State Councilor Wang Yi Poland is open to COFDI. Korea reacts strongly to Japanese media report in which a senior member of Japan’s Liberal Democratic party charged dual-use chemicals exported to South Korea ended up in the North. Japan is surprised at Seoul’s strong response to it instituting tighter controls on the export of certain chemicals to South Korea and Seoul making the issue a World Trade Organization (WTO) issue. Japan moving towards a formal WTO case regarding Seoul’s provision of subsidies to South Korean shipbuilders. Hyundai Engineering and Construction signs a $2.7 billion contract with Saudi Aramco for two projects relating to a massive oil and gas refining complex.

MNCs in the News-2019-07-05

Chinese Premier Li Keqiang announces China plans to create a better environment for foreign direct investment (FDI) in China. China’s financial opening leads various foreign investors to move to take control of their China joint ventures (JVs). Chinese outbound mergers and acquisitions (M&A) volume for the first six months of 2019 is the lowest since 2013. During a visit to China, Turkey’s President works to attract Chinese FDI and take advantage of the Belt and Road Initiative (BRI). With the activities of information technology giants gaining increased Japanese government scrutiny, the Japan unit of Facebook joins Keidanren. Japan’s export curbs on semiconductor materials bound for South Korea due to their dispute over forced labor compensation could pressure Samsung and the broader Korean economy. Japanese export controls on high-tech materials and chemicals used in South Korean semiconductor and smartphone manufacturing will stress Korean companies already feeling market and trade pressures. After a gathering between United States (US) President Donald Trump and the heads of major South Korean business groups, some Korean firms stated they would boost their US investments.

Dr. Jean-Marc F. Blanchard's picture

Dialing In or Head in the Clouds? China’s Prospective Opening of its ICT Sector

There are many sectors in China that are closed or highly-restricted as far as foreign direct investment (FDI) is concerned. Drivers of this include political nationalism, a desire to protect domestic firms, and concerns about economic independence.

Dr. Jean-Marc F. Blanchard's picture

Chump Change? The risks of Banking on financial sector opening in China

China has long assured others of its intent to open up its financial sector. While it has never been entirely clear what this means, many have expected China not just to let in more foreign companies, but also to let them hold greater ownership stakes in their China operations and conduct more lines of business.

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.

Mr. Naoyuki Haraoka's picture

Pondering National Security Concerns as a Basis for Trade and Investment Barriers

In March, United States (US) President Donald Trump decided to raise tariffs on steel by 25 percent and on aluminum by 10 percent for national security reasons. This raised concerns about possible retaliation by US trading partners that might lead to a damaging cycle of trade actions that shrank world trade and spurred a global depression. US national security economic-related worries pertain not only to trade but also to foreign direct investment (FDI), especially high-tech FDI, because an increasing number of civilian technologies can be adapted for military use.

MNCs in the News-2018-03-30

China responds to United States (US) World Trade Organization (WTO) complaint that its technology licensing practices are not WTO compliant. Washington considers new mechanisms for reviewing and limiting Chinese foreign direct investment (FDI) into the US technology sector. The Head of Australia’s Foreign Investment Review Board welcomes Chinese FDI as the country moves to improve its ability to minimize any related security threats. Takeda considering takeover of Irish drugmaker Shire as Japanese government seeks to tackle rising healthcare costs for its aging population. Softbank Vision Fund and Saudi Arabia to boost solar production in the Arab country. Tirebank intends to acquire Korean company Kumho Tire from Korea Development Bank because of frictions between Kumho’s workers union and Chinese buyer Doublestar. Renegotiation of South Korea-US Free Trade Agreement causes Hyundai to move production of its new pick-up truck model from Korea to the US. Pertamina reports it secured a contract with the Iranian government to take an 80 percent stake in Mansouri oil field. Jakarta put forth simplified tax holiday scheme in bid to boost investment in the country. Thailand approves USD $7.22 billion high-speed rail project to link three airports. Japanese electric vehicle producers flocking to Thailand in the wake of government promotion packages. Joint venture between Malaysia’s Yinson Holdings and PetroVietnam ordered to stop operations in Vietnamese offshore oil field due to Chinese pressure. InvestKL on track to bring in 100 multinational corporations by 2020. Hanoi announces list of sectors that would be prioritized to receive Japanese high-technology and investment. New Franco-Vietnamese investment deals signed as Vietnam’s Communist Party General Secretary visits France.

MNCs in the News-2017-09-29

China’s National Development and Reform Commission (NDRC) notes possibility China may expand its negative list approach nationwide as early as 2018. State-owned Assets Supervision and Administration Commission (SASAC) representatives encourage foreign investors to partake in China’s mixed-ownership reform of state-owned enterprises (SOEs). At the World Trade Organization (WTO), the United States (US) asks China to hold off implementing its cybersecurity law. US Committee on Foreign Investment in the United States opposition torpedoes Chinese bid to take a 10 percent stake in Dutch mapping company. Kobe Steel Ltd and US Steel Corp. to launch US joint venture to produce steel needed to build cars that meet their respective governments’ tightening emissions standards. Sumitomo has invested in Taiwanese electric scooter maker Gogoro to tap Gogoro’s advanced electronic battery technologies which are in increasing demand due to rising environmental standards. Unilever acquires Carver Korea as Korean makeup brand weakens due to declining sales in China resulting from THAAD tensions. Despite suffering from China’s THAAD related sanctions, Hyundai opens big data center in China to tap Chinese government’s promotion of connected cars. Indonesia's Transportation Ministry opens 12 infrastructure projects worth a total of USD $3 billion to foreign investors. Indonesia’s Indika Energy raises stake in large local coal producer after forced Freeport-McMorRan divesture and new Indonesian government policies drive Korea’s Samtan to reduce its stake in the country. Vietnam’s Ministry of Finance says equitisation progress of state-owned enterprises so far disappointing. World Bank and Vietnam’s Ministry of Industry and Trade collaborate to implement solar projects pilot auction program.

MNCs in the News-2017-09-22

China’s National Development and Reform Commission (NDRC) promises measures to create a better environment for foreign direct investment (FDI). China courts foreign investment in its energy sector to advance its reform initiatives. European Union (EU) Chamber of Commerce in China releases position paper detailing many areas of concern among its members about China’s policies towards inward FDI (IFDI). Chinese expresses concern about possible implications of proposed EU wide investment screening scheme. Toshiba selects consortium to take over its politically contentious USD $21 billion semiconductor business. Prime Minister May visits Japan as Japanese firms become more hesitant about continued investment in Britain due to Brexit’s slow and uncertain progress. Economic and security concerns prompt Korea’s Industry Ministry to review investment plans by South Korean semiconductor and display companies seeking expansion in China. State-owned Korea Electric Corp. represents South Korea in a bid to build Saudi Arabia’s first nuclear energy plant. Indonesia’s demand for steel is expected to rise substantially within the decade, triggering calls to improve investment conditions for steel producers. Foreign investment in Indonesian startups reaches USD $3 billion so far this year with Chinese FDI patterns shaped by government initiatives. New Thai Digital Park proposed, opening new potential vistas for foreign investors. Sumitomo Corporation starts construction third industrial park in Vietnam with Vietnam’s Deputy Prime Minister calling for best possible conditions for investors. With central government support, Hanwha Techwin to open first of three Vietnamese aircraft engine parts factories early next year.

MNCs in the News-2017-05-19

Almost five dozen global business groups send letter to top Chinese officials asking China to postpone the implementation of its cybersecurity law. Foreign pharmaceutical companies seek new ways to get high off China’s pharmaceutical policy reforms. Several American senators scream that Ant Financial’s takeover of MoneyGram is a national security threat. Joint strategic and security concerns over China’s Belt and Road initiative drive Japan and India to engage in new economic partnership. China’s economic retaliation against South Korea following South Korea’s adoption of THAAD missile system decreases after the installation of a new Korean government. Daewoo E&C and Hanwha E&C partner with Saudi Arabian government to develop new Saudi Arabian city. Wanda Group Chairman meets with Malaysia’s Prime Minister and considers investment exceeding USD $10 billion in Bandar Malaysia development. Malaysia’s troubled carmaker Proton seeks to sell up to 51 percent stake to foreign investor. Survey shows that despite government encouragement to go overseas smaller Singapore businesses emphasize local investments. Vietnam’s President welcomes Chinese hi-tech investment as Hanoi pursues a green economy and economic growth. Transfer pricing continues to be a serious problem with foreign investment in Vietnam.

Pages