International Political Economy Of The FDI Security Screening Mechanism

In the wake of the 2008 international financial crisis,most of major economies in the world have strengthened their security screening over foreign direct investment(FDI).This move has made significant impacts on the global market and international relations,and became the center of attention for governments,businesses and academics.This dissertation turns to analyze the EU Regulation Establishing a Framework for the Screening of FDI into the Union,which is the first legislation of FDI screening mechanism at the EU level,and takes it as the case study,to further address the two important and interrelated questions: First,why did the EU,which has always advocated the free flow of capital and the open investment in its record,establish such a unified FDI screening mechanism this time?Second,why the FDI screening mechanism established by the EU is the non-mandatory cooperation mechanism,rather than the USA-style mandatory review mechanism?The existing research literature is far from convincing answers to the above questions.This dissertation makes full use of a large number of official documents,such as working papers,meeting minutes and research reports from international organizations,EU institutions and its member states,and first-hand interviews with EU officials and staff of the Chambers of Commerce and think tanks in Europe.Being rooted in the theories and methodologies of international political economy,and on the lens of the unique EU as a supranational actor and a normative power,this dissertation starts off with its analysis of the interrelation between the internal and external factors of the EU,and essentially constructs up its own analytical framework from such three dimensions: interest preference,institution and norms.Accordingly,this dissertation attempts to provide a new explanation to the adjustment of EU‘s foreign investment policy.This dissertation structure is as follows.Firstly,it analyzes the interest divergence and compromise among the major players in the process of the EU foreign investment screening legislation-the EU member states at such a different position: the core,the peripheral,and the middle zone,especially the cooperation based on different preferences among the core countries,i.e.,Germany and France.Secondly,from the perspective of power distribution and agenda setting,it combs the decision-making system and process of the EU foreign investment screening legislation,and clarifies the contradiction and coordination between common commercial policy and the principle of free capital flow,between EU institutions and its member states,and among different EU institutions.Thirdly,from the perspective of non-material factors,it discusses the new developments of international investment policies and the impact on the upgrade of EU‘s norms,including how the EU utilizes so-called "Brussels effect" to maintain its influence as a normative power.This dissertation has made such conclusive remarks.The foreign investment screening mechanism established by the EU,as well as the mechanism‘s non-mandatory characteristics,is a comprehensive product of such three factors: the interest game of EU member states,the power distribution within the EU,and the changes of international norms.In addition,it is the concrete extension of the EU integration in the field of foreign investment policy,and an adjustment made by EU to adapt to the latest development of globalization.At the same time,the EU‘s values and the recognition of norms have an important impact on this process.Unlike the U.S.,which mainly restricts foreign investment for the purpose of power competition,the EU‘s introduction of the Regulation on screening of FDI,can not be simply defined as a protectionist measure.Instead,under the premise of ensuring legitimacy,the EU tries to economically safeguard the free flow of capital and a unified market inside the EU,politically maintain the coordination and coherence of the EU as a whole,and consequently to strengthen its identity as a normative power in international relations.The main innovative and theoretical contributions of this dissertation include: through the empirical research,it has contributed a comprehensive case study of FDI to the broader studies of international political economy and the EU regional study,enriched and developed the traditional analysis framework of FDI-host country,and in particular,proved how the non-material factors such as norms got important in the process of defining interests and establishing institutions.At the end,it provides a footnote for the latest theoretical development of international political economy.