Snow Xue XIA

Wong MNC Center News Blurbs

MNCs in the News

April 7

Japan

The Iran-Japan Investment Treaty, which was signed in 2016 in Tokyo, will take effect on April 26. The treaty is designed to protect the investments of Japanese companies in Iran across various business sectors including natural gas and petroleum and to enhance relations between the two countries by promoting closer economic cooperation. Earlier, a source at the Japanese Ministry of Economy, Trade and Industry commented that “[t]he treaty is seen as a tailwind for Japanese companies considering investments” (“Iran-Japan investment protection agreement to enter into force late-April,” Financial Tribune, April 3, 2017, https://financialtribune.com/articles/economy-domestic-economy/61666/ira...)

The amount of foreign acquisitions carried out by Japanese businesses reached a new record of USD $97.9 billion by the end of fiscal year 2016. Unfavorable economic conditions in Japan have driven Japanese companies, even some with little experience in international acquisitions, to seek opportunities overseas, especially in Europe and the US. However, the percentage of companies with successful foreign mergers and acquisitions (M&A) is about 20 percent, relatively low. A good example of a problematic M&A is Toshiba’s purchase of Westinghouse (“Japan Inc.'s overseas acquisitions hit record,” Nikkei Asian Review, April 3, 2017, http://asia.nikkei.com/Japan-Update/Japan-Inc.-s-overseas-acquisitions-h...)

Malaysia

A “tier-one aerospace manufacturer,” allegedly from the US, plans to invest in Malaysia, contributing to high-income job creation and benefiting local small and medium enterprises (SMEs). The investment would advance the government’s “Aerospace Industry Blueprint 2015-2030 road map, launched in 2015,” with the goals being “very achievable” given the projection for future Boeing and AirBus orders. To ameliorate Malaysian concerns about potentially uncertain investment flows following Trump’s election, US ambassador Kamala Shirin Lakhdhir stressed that US companies in Malaysia make autonomous decisions “according to the commercial environment” (David Tan, “Tier-one aerospace firm to invest in Malaysia,” April 3, 2017, http://www.thestar.com.my/business/business-news/2017/04/03/tierone-aero...)

India and Malaysia have signed pacts for deals with a value of USD $36 billion, with the lion share of the projects being carried out in Malaysia. According to India’s commerce ministry, Malaysian and Indian companies from business sectors including infrastructure, engineering and oil witnessed the signing process. Various Indian companies signed memorandums of understanding with Malaysian industries for investment, with one of the most noteworthy agreements being the development of “an integrated maritime city on Carey Island, southern Malaysia,” worth USD $23 billion (Shuriah Niazi, “India, Malaysia sign $36B in investment deals,” April 4, 2017, http://aa.com.tr/en/asia-pacific/india-malaysia-sign-36b-in-investment-d...)

April 14

Malaysia

A North Korean defector revealed that Han Hun Il, a North Korean who established Malaysia Korea Partners (MKP) in Malaysia, has “funneled money to the leadership in Pyongyang” for over two decades. He added Han has important connections with the Central Committee, which operates its nuclear programs. MKP's bank subsidiary in Pyongyang is under investigation by the United Nations (UN), as foreign joint ventures are not allowed to have a financial subsidiary in North Korea (James Pearson, Tom Allard and Rozanna Latiff, “Exclusive–‘Dollars and euros’: How a Malaysian firm helped fund North Korea's leadership,” Reuters, April 10, 2017, http://www.reuters.com/article/us-northkorea-malaysia-business-idUSKBN17...)

During the recent Global Transformation Forum (GTF) 2017, the Digital Free Trade Zone (DFTZ), jointly created by China’s Alibaba Group and the Malaysia Digital Economy Corporation (MDEC), was launched. It is “the world’s first digital global trade platform outside China” and will be a “future one-stop digital hub of logistics, payment gateway, clearance and data standardisation.” The DFTZ reflects the 2010 launched National Transformation Programme (NTP). The digital trade platform is estimated to support USD $65 billion worth of goods (Dr Irwan Shah Zainal Abidin, “Another leap forward,” New Straits Times, 22 Apr, 2017, http://www.nst.com.my/node/229642)

April 21

Japan

Sharp Corp. is considering “a joint bid” with parent company, Hon Hai Precision Industry Co., to invest in Toshiba’s memory chip business, seeking to mitigate the Japanese government’s national security concerns. At the same time, “state-backed turnaround fund” Innovation Network Corp. of Japan (INCJ) also is “considering investing” in Toshiba’s chip unit. INCJ Chairman Toshiyuki Shiga said that in case the INCJ decides to invest in the firm, partners would be needed. Toshiba is likely to select the winning bidder in July (“Sharp mulls jointly investing in Toshiba chip unit with Hon Hai,” The Japan Times, April 19, 2017, http://www.japantimes.co.jp/news/2017/04/19/business/corporate-business/...)

Malaysia

Malaysia seeks to increase its cooperation with New Zealand in the information technology (IT) and tourism sectors. At the Malaysia-New Zealand joint forum the Malaysian International Trade and Industry minister said New Zealand “had done well in diversifying its economy” and that the country’s tourism and IT sectors “had shown significant growth while offering huge investment opportunities for Malaysia.” Meanwhile, New Zealand’s Trade Minister McClay stated that his country welcomes Malaysian investment in hotel development to deal with the increasing number of tourists (“Malaysia To Expand Collaboration With New Zealand In IT, Tourism Sectors,” Malaysia Digest, April 18, 2017,http://www.malaysiandigest.com/frontpage/29-4-tile/670343-malaysia-to-ex...)

April 28

Japan

Japanese and Russian leaders planned to sign around 20 memorandums of understanding for joint projects during a summit held late April. Tokyo hopes more diversified Japanese-Russian cooperation in areas like urban development, water and traffic infrastructure, and medicine will help fuel progress on the two country’s territorial dispute by enhancing non-energy related economic links. During the summit, Prime Minster Shinzo Abe and President Vladimir Putin hope to make progress on the agreement they made last year to develop joint projects on the disputed Kuril Islands (“Japanese tech to figure heavily in Russian projects,” Nikkei Asian Review, April 26, 2017, http://asia.nikkei.com/Politics-Economy/International-Relations/Japanese...)

Malaysia

Malaysian rights group Perkasa has demanded public discussions on Malaysia’s foreign direct investments, especially Chinese investment, to ensure Malaysian interests. In a roundtable on Chinese investments in Malaysia a participant stated “although investments are positive, there are concerns over governance, transparency, competitiveness of the issuance of the contracts.” In addition, Perkasa requested Putrajaya to publish a white paper on the geopolitical consequences of China’s One Belt One Road initiative for “Malaysia’s labor, finance and security policies as well as the country’s sovereignty” (Yiswaree Palansamy, “Perkasa wants Putrajaya to come clean on foreign investments,” Malay Mail Online, April 22, 2017,http://www.themalaymailonline.com/malaysia/article/perkasa-wants-putraja...)

Under the Economic Transformation Program initiated by Prime Minister Najib Razak in 2010, one “key target that has flourished is medical tourism.” A researcher stated that with various private healthcare hubs in the country, the outlook for foreign investment in the healthcare sector is “very promising.” He added “FDI is streaming into Malaysian healthcare, reflecting external confidence in an economic sector bursting with potential.” The Malaysian government’s spending on the healthcare sector, which is deems essential to the economy, reached USD $5.29 billion in 2016 (“Report: How healthcare is boosting a ‘sick’ Malaysia,” April 24, 2017, Free Malaysia Today, http://www.freemalaysiatoday.com/category/nation/2017/04/24/report-how-h...)

May 5

Japan

Spurred by the upcoming Brexit, Japanese Prime Minister Shinzo Abe has requested the United Kingdom’s (UK) Prime Minister Theresa May to guarantee a “smooth transition for business” where rules and regulations do not change overnight, which may cause confusion. May responded that she wanted to ensure “the UK remains the best place in Europe to run and grow a business.” With Japanese companies having invested over USD $52 billion in the UK, the country is the second favorite destination for Japanese investment (“Japan's Abe cautions against Brexit regulation cliff edge,” The Star Online, April 29, 2017,http://www.thestar.com.my/business/business-news/2017/04/29/japan-abe-ca...)

Tokyo has launched various initiatives to boost foreign investment into the country. These include appointing special advisors and expanding English information services to improve the investment environment for foreign firms. The plans will be implemented by the Japan External Trade Organization (JETRO), with 100 JETRO staff members being assigned to 1,000 foreign firms that have a “high possibility” of investing in the country. The plans will be included in the Japanese government's growth strategy that will be released in June (“Japan steps up push to attract foreign investments,” Nikkei Asia Review, May 3, 2017, http://asia.nikkei.com/Politics-Economy/Policy-Politics/Japan-steps-up-p...)

Global Trade Review, May 5, 2017, >span class="s2">http://www.gtreview.com/russia-and-japan-push-ahead-with-joint-fund)

May 12

Japan

Taro Aso, Japan’s Deputy Prime Minister and Xiao Jie, China’s Finance Minister, recently met on the sidelines of the Asian Development Bank (ADB)’s annual meeting together with central bank representatives from both countries to discuss “the bad loan situation in China and bilateral cooperation in Asia.” Tokyo is concerned that Beijing’s economic problems could spill over to Japan. Tokyo, a major foreign direct investor in China, faces competition from Beijing, as it “increasingly challenges Japan's position in Asia,” with various regional infrastructure projects (Mitsuru Obe, “Japan and China discuss economic ties and cooperation,” Nikkei Asia Review, May 7, 2017, http://asia.nikkei.com/Politics-Economy/International-Relations/Japan-an...)

Malaysia

Mohamed Khaled Nordin, the Chief Minister of the Malaysian state of Johor, told the Johor Assembly that the federal government’s support had increased Johor’s position as a foreign direct investment (FDI) destination. Besides federal government’s support, good infrastructure and Malaysia’s political stability enhanced Johor’s attractiveness to foreign direct investors. The state recorded foreign investments worth USD $10.2 billion for the 2012-2016 period, including a high profile USD $6.9 billion investment from Saudi Arabia’s oil company Saudi Aramco (“Johor attributes federal govt’s support to surging foreign direct investments,” Free Malaysia Mail Online, May 7, 2017, http://www.themalaymailonline.com/malaysia/article/johor-attributes-fede...)

South China Morning Post, May 8, 2017, >span class="s2">http://www.scmp.com/week-asia/geopolitics/article/2093469/bandar-malaysi...)

May 19

Malaysia

After meeting Malaysia’s Prime Minister Datuk Seri Najib Tun Razak in Beijing, Dalian Wanda Group Chairman Wang Jianlin expressed his interest in investing over USD $10 billion in the Bandar Malaysia development. However, no agreement has yet been reached. Earlier, China pledged to encourage Chinese companies to invest in Malaysia and expressed appreciation for Malaysia’s commitment to the Belt and Road Initiative (BRI). At that time, China’s Prime Minister Li Keqiang and Najib signed three MoUs, while two Chinese companies signed another two with Malaysia (Tho, Xin Yi, “Wanda Interested in Bandar Malaysia,”The Star Online, May 14, 2017, http://www.thestar.com.my/news/nation/2017/05/14/wanda-interested-in-ban...)

Proton, Malaysia’s national carmaker, seeks to sell up to a 51 percent stake to a foreign investor because of financial difficulties resulting from bad acquisitions and product quality issues. Proton was founded by Malaysia’s former Prime Minister Mahathir Mohamad who aimed to industrialize Malaysia and disapproved of foreign control over Proton. The board of DRB-Hicom, Proton’s parent company, plans to meet in the near future to discuss bids from China’s Zhejiang Geely Holding Group Co. and France’s PSA Group (Matthew Campbell, and En Han Choong, “Malaysia Eyes Sale of Proton as Mahathir’s Auto Dream Dies,” Bloomberg, May 17, 2017, https://www.bloomberg.com/politics/articles/2017-05-16/malaysia-eyes-sal...)

Vietnam

According to the Vietnam Chamber of Commerce & Industry (VCCI) 2016 Vietnam Business Annual Report, 40 percent of Foreign Invested Enterprises (FIE) sustained losses between 2007 and 2015 yet many still increased their production. The explanation lies in so-called transfer pricing. As local authorities seek to attract more foreign investment, they disregard FIEs’ violations, with a striking example being foreign firm Formosa, which received a tax refund that was even higher than the environmental compensation it had to pay for the environmental damages it caused (Kim, Chi, “Transfer Pricing: the Dark Side of FDI,” Vietnamnet,May 12, 2017, http://english.vietnamnet.vn/fms/business/178067/transfer-pricing--the-d...)

During an economic-trade cooperation seminar held in China’s Fujian Province, Vietnamese President Trần Đại Quang welcomed Chinese hi-tech investment to his country. As the country pursues a green economy, sustainable development and economic growth, Hanoi “treasures all resources,” with private firms and FDI being important potential growth drivers. Hence, Vietnam is making efforts to improve its investment environment and domestic competitiveness to attract more national and international resources. In the past three months, 35 Fujian based firms invested USD $270 million in Vietnam (“Vietnam Welcomes China Hi-Tech Investment: President,” Vietnam News, May 15, 2017, http://vietnamnews.vn/politics-laws/376396/vn-welcomes-china-hi-tech-inv...)

May 26

Malaysia

Geely, the owner of Sweden's Volvo Car Group, announced that it would acquire a share of 49.9 percent in troubled Malaysian automaker Proton from conglomerate DRB-HICOM Bhd, providing access to the Southeast Asian market. It will also buy 51 percent of Proton's stake in British automaker Lotus. The investment is the latest of recent deals between China and Malaysia, but “stands out” as formerly state-owned Proton is often considered “an emblem of post-independence industrialization and economic growth” (Rozanna Latiff, and Norihiko Shirouzu, "China's Geely Buys 49.9 Percent Of Malaysian Automaker Proton," Reuters, May 24 2017, https://www.reuters.com/articl...)

Malaysia’s Prime Minister Datuk Seri Najib Tun Razak announced that despite the “challenging economic climate” the value of this year’s foreign direct investment in Malaysia is estimated to exceed last year’s value of USD $9.59 billion. The government’s transformation programs that attracted FDI and a foreign policy that led to strategic partnerships drove this progress. At the annual Asia-Pacific Roundtable Welcoming Dinner, the Prime Minister pledged that Malaysia “will continue to adapt and adjust in keeping with our national needs and the external environment” (“Malaysia’s 2016 FDI Inflows to Surpass RM41b, Says PM,” Malay Mail Online, May 22, 2017, http://www.themalaymailonline.com/malaysia/article/malaysias-2016-fdi-in...)

Vietnam

Vietnam plans to set up three special economic zones (SEZs) offering foreign investors “greater incentives” and “fewer restrictions.” Planning and Investment Minister Nguyen Chi Dung declared Vietnam now prioritizes investment in “high tech and clean sectors.” FDI in Vietnam reached USD $15.8 billion last year, and is expected to reach at least USD $10 billion in each of the following five years. Approval of the lawmakers of the new SEZs is expected by the end of 2017 (Mai Nguyen, and Matthew Tostevin, “Vietnam Plans to Open 'Outstanding' Special Economic Zones,” Reuters, May 25, 2017, https://www.reuters.com/articl...)

At the recent Vietnam-Spain business forum Deputy Prime Minister and Finance Minister Phạm Bình Minh reiterated Vietnam’s dedication to welcoming foreign investors “with all possible support.” He highlighted Vietnam as a “bright spot” because of its investment attraction policies and tourism and added the country had so far attracted almost USD $300 billion in FDI. A Spanish representative called Vietnam “a priority market,” especially in the fields of infrastructure, agriculture and tourism, and promised “to facilitate collaboration” between both countries’ companies ("Deputy PM Chairs Việt Nam-Spain Business Forum," Viet Nam News, May 25 2017, http://vietnamnews.vn/economy/377088/deputy-pm-chairs-viet-nam-spain-bus...)

June 2

Vietnam

Vietnamese lawmakers called at the recent National Assembly for public private partnerships to attract both domestic and foreign private investment in the railway sector. Although the Vietnamese government encourages investment in the development of its railway system, so far little capital has flowed into this sector. Various deputies blamed the “monopoly of State-owned enterprises” for this situation and pledged to revise the law in order to eliminate SOE domination. The vote on the revised Law on Railway will have place later on this month (“NA Urges Railway Investment,” Viet Nam News, May 31, 2017, http://vietnamnews.vn/politics-laws/377430/na-urges-railway-investment.h...)

During a roundtable talk on US-Vietnam investment cooperation in New York, Vietnam’s Prime Minister Nguyen Xuan Phuc stated “the time is ripe for US businesses to engage more strongly in the economic restructuring of Vietnam.” The Prime Minister highlighted “finance-banking” and “State-owned enterprise equitization” as sectors for further involvement by American firms. The US is one of the top investors in Vietnam with 835 projects, with total FDI of around USD $10.2 billion (“Time Ripe for US Firms to Further Engage in VN’s Restructuring: PM Nguyen Xuan Phuc,” Vietnam Net, May 31, 2017, http://english.vietnamnet.vn/fms/business/179446/time-ripe-for-us-firms-...)

Malaysia

Malaysia and China will organize meetings in the near future to move forward with proposals for the construction of three new ports along the Strait of Malacca, and the joint development of the Bandar Malaysia project. The visit by the Chinese delegation to Malaysia is part of “a quick follow-up” on the infrastructure initiatives that Malaysian Prime Minister Najib Razak and Chinese President Xi Jinping discussed on the margins of the recently held One Belt, One Road conference in Beijing (Leslie Lopez, “Malaysia and China to meet over port projects and Bandar Malaysia,” The Strait Times, May 31, 2017,http://www.straitstimes.com/asia/se-asia/beijing-kl-to-meet-over-port-pr...)

A recent survey by the Japanese Chamber of Trade and Industry Malaysia (Jactim) and the Japan External Trade Organization (JETRO) suggests that this year’s Japanese investment in Malaysia “may rise by at least 30%,” driven by “gradual improvement” in the local economy. Jactim also projects that the upcoming elections in Malaysia may spur more Japanese investment as it may increase political stability. Moreover, Tokyo is encouraging Japanese businesses “to show more interest” in the country (Ho Wah Foon, “Japanese Investments Are Looking Up,” The Star Online, May 28, 2017, http://www.thestar.com.my/news/nation/2017/05/28/japanese-investments-ar...)

June 9

Malaysia

The sale of a 49 percent share in a SK316 offshore gas block by Malaysian state-owned energy firm Petronas has advanced to the second round, with Royal Dutch Shell and ExxonMobil expressing their interest in the project. The sale has been “clouded by political opposition.” Responding to criticisms, Sarawak Chief Minister Abang Johari stated that since the project “cost billions of ringgit and it is of high risk” Malaysia does not want to develop the gas field itself (Anshuman Daga and Sumeet Chatterjee, “Petronas' Stake Sale of Offshore Gas Asset Advances to Second Round: Sources,” Reuters, June 5, 2017, http://www.reuters.com/article/us-malaysia-petronas-sale-idUSKBN18W0WN)

International Trade and Industry Minister Datuk Seri Mustapa Mohamed urged Malaysians to adopt a “rational attitude” towards its local equity ownership policy since it would be “a grave disservice” to force a firm to continue making losses “just to maintain the 100 percent local ownership.” Mustapa said government subsidies to local companies will not improve their competitiveness and would eventually “destroy” his country’s economy. He added “foreign participation” should be allowed, “as we want our country to progress” (“Adopt Pragmatic Attitude to Local Equity Ownership Policy, Malaysians Urged,” Malay Mail Online, June 2, 2017, http://www.themalaymailonline.com/malaysia/article/adopt-pragmatic-appro...)

Vietnam

The Secretary of the Ho Chi Minh City Municipal Party Committee Nguyen Thien Nhan welcomed US investors at a “Meet the USA 2017” forum held in the city. Nah stated that investing in Vietnam is “the right decision at the right time,” highlighting that it is “easy” for US investors to find “active” Vietnamese, given the country’s stable political environment and “peace and harmony among the people.” He also stressed his country’s willingness to cooperate with the US in the 4.0 Industrial Revolution (“HCM City Authorities Call for Further Investment from US Investors,” Nhan Dan Online, June 7, 2017, http://en.nhandan.org.vn/business/item/5258202-hcm-city-authorities-call...)

During a recent investment promotion forum held in Tokyo, Vietnamese Prime Minister Nguyễn Xuân Phúc promised to improve the business environment of his country to attract more Japanese investment. His promises included the speeding up of institutional reforms and completing investment policies “to ensure consistency, openness, transparency, predictability and convenience for investors.” Japanese Prime Minister Shinzo Abe added that both parties will cooperate to support Japanese investors in Vietnam. At the event companies from both countries signed investment agreements with a value of USD $22 billion (“PM Phúc calls for more Japanese investment,” Việt Nam News, June 6, 2017, http://vietnamnews.vn/economy/377790/pm-phuc-calls-for-more-japanese-inv...)

June 16

Malaysia

In a recently filed lawsuit the US government alleged that money “misappropriated from a Malaysian state fund” was used to partly finance the USD $2.2 billion takeover of Houston-based Coastal Energy in 2014. Malaysian financier Low Taek Jho collaborated with Compañía Española de Petróleos SAU and gained a “nearly immediate” 600 percent return on investment without any commercial basis. Part of the misappropriated money has allegedly been transferred to the accounts of Malaysian Prime Minister Najib Razak (Rozanna Latiff and Nathan Layne, “Misappropriated 1MDB Funds Helped Finance $2.2 Billion Energy Firm Deal - U.S. Lawsuit,” Reuters, June 13, 2017, https://www.reuters.com/articl...)

During his visit to Indonesia, Malaysia’s International Trade and Industry Minister Datuk Seri Mustapa Mohamed announced that Malaysian businesses will continue to invest in Indonesia, as Malaysia has confidence in Indonesia’s strong economy and efforts to reduce “red tape” for investors. Between 2008 and 2016, Malaysia’s investment in Indonesia reached around USD $15 billion and Indonesia invested around USD $2.6 billion in Malaysia. Malaysia promised to put forward proposals that will be further discussed during the upcoming Joint Investment & Trade Committee Meeting to enhance trade (Daljit Dhesi, “Malaysia to Increase Investments in Indonesia,” The Star, June 13, 2017, http://www.thestar.com.my/business/business-news/2017/06/13/malaysia-to-...)

Vietnam

During a meeting with Australian businesses, Vietnam’s Deputy Prime Minister Truong Hoa Binh encouraged businesses from both sides to build investment partnerships in various areas including infrastructure, high technology, and renewable energy, and emphasized Vietnam’s desire to advance its investment environment “to enter ASEAN’s leading group.” Australian representatives expressed their willingness to promote bilateral exchanges. As of the end of March, Australia has 396 projects in Vietnam with a total value of USD $1.82 billion (“Vietnam Hopes for Sustainable Economic Ties with Australia,” Nhan Dan Online, June 12, 2017,http://en.nhandan.org.vn/politics/item/5269902-vietnam-hopes-for-sustain...)

Vietnam has developed a new decree to deal with transfer pricing used by multinational companies as a way to avoid taxes. Experts opine the decree has brought Vietnamese law “more into line with global legal standards.” The decree showcases changes in Vietnamese tax registration and evaluation of related-party transactions, and will create effective regulations and monitoring of multinational corporations. However, experts identified a few problems implementing the decree, including a lack of local level data (“New Decree A Game Changer for Transfer Pricing,” Viet Nam News, June 12, 2017, http://vietnamnews.vn/economy/378132/new-decree-a-game-changer-for-trans...)

July 7

Malaysia

A recent industry briefing attracted potential bidders including nearly “400 participants from 165 international and local organizations” for a tender for the Kuala Lumpur-Singapore High-Speed Rail. The objective of the briefing was to inform the attendees about the progress and the key features of the railway project. Participants included those from China, Japan, South Korea and Europe. Land Transport Authority (LTA) chief executive Ngien Hoon Ping stated that they are happy to see “strong interest” from these global companies (“Key Tender for KL-Singapore HSR Draws Strong Global Interest,” Malay Mail Online, July 6, 2017, http://www.themalaymailonline.com/malaysia/article/key-tender-for-kuala-...)

Following the Malaysian government earlier this year dismissing a consortium involving Malaysian and Chinese firms that was committed to buy a majority stake in the Bandar Malaysia project, Malaysia’s Ministry of Finance issued a Request for Proposal (RFP) for businesses interested in the project. The government stated it would instead keep full ownership of the project. The RFP showed specific requirements for companies in terms of size and “local content,” and foreign companies are welcomed to be involved (“KL Issues Request for Proposal for Development of Bandar Malaysia,” The Straits Times, July 6, 2017, http://www.straitstimes.com/asia/se-asia/kl-issues-request-for-proposal-...)

Vietnam

Vietnam’s Foreign Investment Agency has revealed that so far this year foreign investors have invested in 19 of 21 business fields, with real estate ranking second with a total investment of USD $53 billion. Foreign investment has been flowing into Vietnam’s real estate sector through mergers and acquisitions. Foreign investor’s interest has been fueled by Vietnam’s economic prospect and Vietnamese government policies that have removed barriers to foreign investors buying stakes in local companies (“Real estate M&As expected to reach record high in 2017,” Vietnam Net, July 5, 2017, http://english.vietnamnet.vn/fms/business/181175/real-estate-m-as-expect...)

Vietnam’s FECON Corporation signed a MoU with Saudi Arabia’s ACWA Power to jointly develop renewable energy projects in Vietnam. The MoU specified that FECON and ACWA would first assess renewable energy investment opportunities in Vietnam. After that both parties would “incorporate joint ventures” for investment in specific projects. ACWA chose Vietnam as its “first Southeast Asian investment destination in renewable energy projects” because the Vietnamese government has prioritized the development of renewable energy, particularly wind and solar energy (“VN to Co-operate with Saudi Arabia in Renewable Energy Projects,” Viet Nam News, July 3, 2017, http://vietnamnews.vn/bizhub/379405/vn-to-co-operate-with-saudi-arabia-i...)

July 14

Malaysia

Per Singaporean prosecutors, Malaysian financier Low Taek Jho is the “central figure” in probes related to 1Malaysian Development Bhd. (1MDB), a state fund that was established for joint development projects, but that Low misappropriated. Around USD $1 billion that 1MDB was supposed to invest in a joint venture with PetroSaudi International Ltd. was diverted to a bank account “beneficially owned by Low.” A global effort is under way to investigate various banks and individuals’ roles in this scandal and recover funds (Andrea Tan and Chanyaporn Chanjaroen, “Malaysia’s 1MDB a ‘Victim’ of Jho Low, Prosecutors Say,” Bloomberg, July 12, 2017, https://www.bloomberg.com/news/articles/2017-07-12/singapore-banker-admi...)

July 21

Malaysia

IQI Group Holdings Chief Economist Shan Saeed stated Malaysia will become a significant economic corridor for the Association of Southeast Asian Nations (ASEAN) and China over the next five years because of foreign investors’ confidence in Malaysia’s economy. Shan stated Prime Minister Datuk Seri Najib Razak’s diplomatic efforts, predominantly with China and Saudi Arabia, had “improved Malaysia’s status in the eyes of the world.” He added besides the country’s “strong economic fundamentals,” its strategic geographical location contributes to its attractiveness as an investment location (“Malaysia Poised to Become Asean, China Economic Corridor: Economist,” New Straits Times, July 19, 2017, https://www.nst.com.my/business/2017/07/258753/malaysia-poised-become-as...)

China’s restrictions on bank loans to the Dalian Wanda Group will diminish the prospects for completing the Bandar Malaysia project. Wanda’s, which Malaysia’s Prime Minister Najib Razak recruited in May to help rescue the venture, problems with Chinese regulators led to a rise in the share price of the previous JV partner in the Bandar project, Iskandar Waterfront City Bhd (IWC). IWC’s share price has been under pressure since the deal was terminated earlier this year and the Wanda deal was announced (“More Bad News for Bandar Malaysia,” Free Malaysia Today, July 18, 2017, http://www.freemalaysiatoday.com/category/nation/2017/07/18/more-bad-new...)

Vietnam

Vietnam’s Prime Minister has authorized Decision No. 11/2017/QD-TTg to boost the development of solar power projects in the country. The decision obligates Electricity of Vietnam (EVN) to buy “all electricity produced by grid-connected projects” at 9.35 cent per kWh. Therefore, many solar power investors, including Vietnamese, Korean, Indian, Thai, French and German ones, expressed their interest “to start spending billions of dollars” on Vietnamese projects. However, at present, many projects are “just on paper at the preliminary stage.” Moreover, foreign investors are looking for reliable local partners (“Solar Power Attracting Billions of Dollars Investments,” Vietnam Net, July 18, 2017,http://english.vietnamnet.vn/fms/business/182281/solar-power-attracting-...)

During a recently held conference in Ho Chi Minh City (HCM City) three Laotian provinces, all strategically located along the East-West Economic Corridor, have sought Vietnamese investment in various sectors. Lê Thanh Liêm, deputy chairman of the HCM City People’s Committee, said the city sees Laos as a “strategic and promising market” for investment and trade. So far over 30 enterprises from HCM City have invested over USD $250 million in Laos. The deputy chairman also expressed his wish for effective long-term cooperation with Laos (“Lao Provinces Organize HCMC Investment Conference,” Viet Nam News, July 20, 2017, http://vietnamnews.vn/economy/380442/lao-provinces-organise-hcmc-investm...)