A Comparative Study Of The Impact Of The U.S. And The EU’s Foreign Investment Security Review On China’s Foreign Direct Investment

Statistics from the World Investment Report 2021 show that the investment restriction policies introduced throughout 2020 have reached the highest level since 2003 and are mainly implemented by developed countries.At present,the Chinese technology industry is in a critical period of transformation and upgrading.Mergers and acquisitions of relevant companies in the EU and the United States in the field of science and technology are a relatively quick approach.In recent years,investment protectionism in western developed countries and regions represented by the United States and the European Union has shown obvious signs of activity.The former has successively promulgated the "Foreign Investment Risk Review Modernization Act" with protectionist characteristics and its pilot projects and specific implementation rules from 2018 to 2020;the latter has issued the "EU Foreign Investment Review Regulations" in the same period.In recent years,China’s foreign direct investment in the United States and the European Union,especially in the field of science and technology,has been frequently scrutinized.Many investments have been rejected by the United States and the European Union due to reasons such as "national security".Enterprises that have obtained advanced technology from foreign enterprises to upgrade their industries have been blocked.This article uses literature research,historical analysis,comparative analysis,and case analysis combined with relevant data to explore the impact of the US and EU foreign investment review systems in China on direct investment in the US and EU.First,clarify the development context of foreign investment security review and the current research status of the impact of the system on Chinese multinational enterprises by consulting a large number of documents;second,analyze the evolution of the foreign investment review system in the United States and the European Union and the background,and compare and analyze the foreign investment review systems of United States and EU.The similarities and differences of the foreign investment review systems;third,through a quantitative method to study the changes in the stock and flow of Chinese technology industry’s direct investment in the United States and the EU within a certain time frame before and after the latest foreign investment review in the United States and the European Union,and analyze the impact of the policies on China’s foreign direct investment as a whole and the technology industry’s foreign direct investment;fourth,by collecting typical cases of Chinese multinational companies’ mergers and acquisitions in the United States and the EU,analyzing the foreign investment security review systems of the United States and the EU,and on this basis explains the impact of the U.S.and EU foreign investment security review systems on China’s mergers and acquisitions in these countries(region);at the end of this article,it summarizes the conclusions and makes corresponding recommendations for the government and corporates perspectively.The research in this paper found that,firstly,the United States is the first country to formulate and apply the foreign investment security review system,so it has a certain demonstrative effect for other countries and regions to formulate foreign investment security review systems;secondly,the EU is still one of the most open regions in the world.The EU Foreign Investment Regulations is an EU-level foreign investment review system that respects the foreign investment review sovereignty of EU member states,and the degree of economic development of each member country and the differences in the system lead to less mandatory and strict review than that of the United States;finaly,the United States and The EU’s security review of technology-based foreign direct investment is particularly strict,which will adversely affect Chinese companies’ investment in the region’s technology sector.