Changing Mechanism of the National Security Review for Foreign Investment – A Perspective from the Foreign Investment Risk Review Modernization Act

Abstract

As the host country with the largest capital inflow, the United States has always been highly concerned about its foreign investment access and review policy. Facing the uncertainty of Sino-US trade friction development, China must also pay close attention to the United States' foreign investment national security review policy. The Foreign Investment Risk Review Modernization Act (FIRRMA), signed into law in 2018, expanded the scope and revamped the process of CFIUS 'review of foreign investment and is bound to introduce even more changes to the national security review of foreign investment in the United States. Against the background of the rapid increase in the scale of Chinese outbound investment, the strict national security review by the Committee on Foreign Investment in the United States (CFIUS) conducted by Chinese-funded enterprises especially those based in the digital economy for their acquisitions of U.S. companies in recent years. The article discusses the new trends and new ideas in the national security review of foreign investment in the United States as well as the effective responses of Chinese-funded enterprises in light of the signing and implementation of FIRRMA.