Comparison of China's direct investment in Asia, Europe and America 中国在亚洲、欧洲和美洲的经济和直接投资比较

3.4.2 Dealing with national security risks: different sensitivities and attitudes

Asia, Europe and the United States generally adhere to the principle of openness, and both have an appropriate regulatory system to monitor foreign investment against a limited variety of national security threats. In general, international investment agreements and bilateral investment agreements accept such additional restrictions on the free flow of capital. (2) a country usually pays special attention to four aspects of foreign assets: control of strategic assets (such as ports and pipelines); Control of production of key defensive inputs (such as military semiconductors); Transfer sensitive technologies or skills to hostile regimes abroad; Espionage, sabotage or other destructive actions. China has received special attention in at least five aspects. First, China is likely to become the world's largest economy in the next 20 years, which gives China the opportunity and ability to change the global national security situation. Second, China is an authoritarian country with a one party system, and its values and business norms may be different from those of OECD countries. Third, China is not a member of the North Atlantic Treaty Organization (NATO), but it is an emerging force with a modern military. Fourth, China has a bad record in terms of export control rules. The United States and its allies believe that China is one of the major countries that sell sensitive technologies to dangerous regimes, including Iran, North Korea and Pakistan. Fifth, the outside world thinks that China conducts economic and political espionage activities through the intelligence networks in Europe and Asia, thus posing a greater threat.
In the United States, the Committee on foreign direct investment (CFIUS) monitors foreign investment due to national security issues. The Cfius review framework has been carefully designed to reflect the traditional attitude towards FDI (with some exceptions). CFIUS does not monitor investments for economic security reasons, but only for limited security reasons, and treats foreign investors equally. The recent track record of CFIUS reflects the openness of the United States to Chinese capital: most of the more than 500 investments from 2013 to 2016 did not require any approval. Transactions submitted to CFIUS receive a fair hearing and are usually approved. In recent years, CFIUS has approved China's mergers and acquisitions in many sectors, including aerospace industry, power generation and resource mining. At the same time, technical changes also force CFIUS to adapt to the new actual situation. However, it takes time to recalibrate the definitions and standards in the monitoring review. This process makes some investors have doubts about the business prospects, especially those in the electronic communication and information technology sectors. In addition, in the past, some groups have tried to politicize the monitoring process. These groups mainly include established commercial interests who attempt to take advantage of the "fear of China" sentiment, and "security hawks" who are determined to exclude Chinese enterprises regardless of specific threats. Some recent efforts to block the politicization of investment have not been successful, including irresponsible remarks (for example, the call of the steel core Subcommittee to stop the rebar project in Mississippi by Anshan was publicly rejected. Chinese enterprises have accumulated experience in managing political risks, but the politicization of transactions is still a major problem threatening us China investment relations.

In Asia and Europe, the debate about the potential impact of Chinese investment on national security is less intense than in the United States. The EU has no consistent method for national security monitoring, but entrusts Member States to monitor. EU laws allow monitoring of foreign investment for national security reasons, but the Treaty does not give a clear definition of national security, and the relevant systems of member states are very different. Although only a few cases of China's investment in Asia have been politicized for national security reasons, the definition of national security in Europe is relatively unclear, and the review process is not systematic, which may open the door to the implementation of protectionism in the future. A consistent Pan European monitoring framework can deal with relevant risks and put Europe in a better position in global investment policy discussions.