The Impact Of The Foreign Investment Risk Review Modernization Act On China’s Investment In The United States And Its Countermeasures

At present,the Sino-US trade conflict is escalating,and the United States has chosen to continuously tighten its foreign capital security review policy.In August 2018,the Foreign Investment Risk Review Modernization Act(hereinafter referred to as FIRRMA)marked another major move by the United States.It can be said that the national security review system of foreign capital undertakes the function of negative list and supervision.Specifically,FIRRMA first expanded the review scope of CFIUS,which is reflected in expanding the scope of "covered transactions".Secondly,FIRRMA expanded the scope of identification of the United States’ national security and added factors such as technology,data and network security.At the same time,FIRRMA further improved the review process and introduced simple declaration and compulsory declaration mechanisms;In addition,in order to improve the flexibility of CFIUS in dealing with national security issues,CFIUS granted the right to stop trading and expanded the right to decide and supervise mitigation measures,while optimizing its resource allocation.The reform aims to improve the legal lag and CFIUS’s lack of capacity in the face of the new situation.At the same time,it pays attention to the investment of Chinese enterprises,which is reflected in the continuous increase in the number of cases to review Chinese investment,the more obvious bias of review and the further expansion of the fields involved.Overall,the tightening trend increases the risk of investment in the United States.In this context,the author focuses on two aspects in this thesis.On the one hand,combined with the development background and the latest changes,the author analyzes the possible resistance of Chinese enterprises to invest in the United States;On the other hand,the author analyzes the current situation and problems of China’s foreign capital national security review system,and provides suggestions for the further improvement of China’s foreign capital security review system by refining the advantages and experience of the United States.This thesis first analyzes the background and motivation of FIRRMA,including the challenges faced by CFIUS,the trump administration’s "US priority policy" and concerns about Chinese investment.Then,the author focuses on the main revision contents of FIRRMA,analyzes the specific problems,and studies the main characteristics,including the clarity of core principles,the change of review focus and review stage,and the change of system positioning.Secondly,the author analyzes the impact of FIRRMA on China’s investment in the United States from two aspects:investment restrictions and investment risks.In terms of investment restrictions,it mainly analyzes the investment areas,specific investment types and investment consequences;In terms of investment risk,it focuses on the restart of review and suspension of transaction,the signing and implementation of risk mitigation agreement,the increase of investment cost caused by the extension of review cycle,and the reduction of relief channels caused by the change of exemption scope of judicial review.After raising the question,the author solves the problem of how China should deal with it from the two levels of enterprise and country.At the enterprise level,the countermeasures mainly include making full use of simple declaration and mitigation agreement,strengthening communication through negotiation,paying attention to investment methods and investment opportunities,and making rational use of litigation means.At the national level,the countermeasures include promoting the negotiation of China US bilateral investment agreement,strengthening the guidance for cross-border investment of enterprises,improving the national security review system for foreign investment in China,and actively learning from the investment experience of other countries.In terms of perfecting the domestic system,the author puts forward some suggestions from multiple angles combined with the current situation and existing problems of China’s system.In short,the author believes that we should continue to pay close attention to the changes of the national security review system of foreign capital in the United States,deeply grasp its development direction,and comprehensively evaluate and track the impact of the national security review system of foreign capital in the United States on China’s investment in the United States,so as to provide effective countermeasures for enterprises,safeguard the investment interests of Chinese enterprises,and further promote the high-quality development of Chinese enterprises’ investment in the United States.China’s institutional bargaining power should also be considered on the basis of its institutional advantages and the confidence of Chinese enterprises in the future negotiation.Therefore,in this process,we can continuously improve the local institutional problems and enhance the institutional confidence of national security review.On the one hand,we can ensure that while attracting foreign investment,we can better safeguard our national security and achieve a balance between economic development and national security;On the other hand,in the face of necessary circumstances,we can take countermeasures against the United States to safeguard the interests of enterprises and national interests.This is also the reason why the author focuses on improving China’s foreign capital security review system in the third chapter.