Research On Reform Of The Screening System Of Foreign Direct Investments Into The EU And Its Impacts On China’s Direct Investments Into The EU

In recent years,China’s foreign direct investments have developed very rapidly.China’s foreign direct investment flows have increased continuously for 14 years since 2002,and reached a historical peak of $196.15 billion in 2016.With its good industrial foundation,advanced management experience,excellent scientific research technology and easy and stable investment environment,the European Union has become a "paradise" favored by Chinese investors.As Chinese companies’ investment and acquisition into the EU become more frequent and fierce,Chinese capital has gradually focused on the EU ’s high-tech industries and strategic development fields,which has made the EU worry about their own technology loss,trade imbalances and sovereign security.In addition,there has been a long-standing view within the EU that the EU ’s major trading partners have screening mechanisms for foreign direct investment,while the EU ’s screening tools for foreign direct investment are very poor.The loose foreign investment policy has caused the EU countries to be treated "unequally".Therefore,under the pressure of the international environment,the threat of Chinese capital and the efforts of some member countries,the EU established a framework for the screening of foreign direct investments into the Union on the grounds of security and public order.The promulgation of the framework marks the transition of the European Union from a free and easy foreign investment policy to an increasingly tightened screening policy for foreign investment,which makes up for the absence of legislation in foreign investment screening at the EU level and fills the lack of coordination and cooperation among the member states.The EU ’s new screening mechanisms for foreign direct investment has two distinct characteristics:it focuses on investments in key areas and important technology and the investments initiated by state-owned enterprises.The two binding rules are clearly in line with the main features of Chinese FDI into the EU in recent years.As the EU ’s main imaginary enemy,China is bound to suffer from the impact of the reform of the screening policy of foreign direct investments into the EU.As a result,the sensitivity of investments in specific industries will be increased and state-owned enterprises will suffer greater scrutiny.Through empirical analysis,I draw the conclusion that the reform of the screening system of foreign direct investments into the Union has a negative impact on Chinese FDI into the EU and several targeted suggestions are made.At the national level,it is necessary to improve and optimize China’s screening system of foreign direct investment and risk prevention system,and to promote new results in China-EU investment relations by maintaining high-level political dialogue and strengthening reasonable and correct guidance for corporate overseas investment.At the enterprise level,it is necessary to consolidate their own strength,improve the quality of overseas investment,enhance interaction and communication with the EU official and the private sectors,strengthen cooperation with professional intermediaries,and improve their own risk prevention mechanism in order to deference against shocks caused by increasingly tightened foreign investment policy of the EU.