Foreign direct investment in the United States and national security policy

Abstract

Abstract Up to now, the issue of direct foreign investment has been viewed as an economic or commercial problem involving relative wage rates, the fairness of government subsidies, comparative inflation and interest rates, and the proper role of government in managing the economy—the question of “targeting” in Japan or “industrial policy” in the United States. New concerns are now being raised in some quarters about the national security impact of what had previously been viewed primarily as a commercial activity. For a variety of reasons, foreign companies are choosing to use the surpluses generated by trading advantages as an opportunity to directly invest in the U.S. economy, especially in ways that improve their future access to American cutting‐edge technology. Both the economic and national security implications of this activity have remained largely unexamined. This article will explore this development and point out potential effects on the future of the U.S. economy and national defense. It will ...