An Impact Of CFIUS Review Mechanism On FDI Flow

With the increasing competition in international trade and economics,especially the continuous improvement of China’s international investment status,international investment protectionism has begun to rise,which is very evident in China’s direct investment in the United States,especially in mergers and acquisitions.In recent years,the US government has strengthened its CFIUS foreign investment review mechanism on the grounds of "national security".It will undoubtedly have an important impact on China’s investment in the United States,which is the focus of this paper.The article is divided into five parts:first,analyze the current status and characteristics of investment in the United States;then elaborate on the US national security system,which focuses on the latest changes in the US national security review mechanism;second,use data and case studies to analyze CFIUS for Chinese companies.The review of direct investment in the United States;again,is the empirical analysis of the impact of CFIUS on China’s FDI.The article quantifies the US national security review as the core explanatory variable,and then establishes a model to analyze the impact;finally,based on the aforementioned qualitative analysis and experience The analysis draws conclusions and proposes countermeasures.This paper quantifies the US national security review mechanism based on the latest data on China-US FDI and the analysis of merger failure cases.The model estimates show that the US national security review system will significantly affect China’s direct investment in the United States,with a negative impact.At present,many countries have established relevant foreign investment review mechanisms,and then use this mechanism to conduct various reviews of the transaction content of foreign investment companies.However,not every country’s security review mechanism has been fairly well established,and many countries have defects,which have a negative impact on the healthy development of the domestic economy.The reason why China’s direct investment in the United States has encountered obstacles is that the reason given by the United States is that it has hindered the national security of the United States.However,the fundamental reason is that China’s economic and trade relations have changed from a capital-absorbing country to a capital-based investment country.In particular,China’s investment in the United States continues to grow,especially in the high-end industries,which makes the United States feel anxious about China’s development.Trump’s "trade war" against China is mainly in terms of investment barriers,setting tariff barriers,and restricting technology exports.The reason for setting these barriers is to indirectly meet strategic demands in a way that is economically competitive.At present,the US foreign-funded national security review has become a major "risk" for Chinese companies to invest in the United States.China has occupied the largest number of countries in the US for foreign security review for many years.These reviews have brought great resistance to China’s direct investment in the United States and the development of Chinese-funded enterprises.In this context,the primary task of the Chinese government and enterprises is to fully study the operation and mechanism of the US security review mechanism and the impact and impact of China’s investment in the United States,and prepare measures to ensure that China’s investment interests will not be got damage.