Policy Forum 6 (January 2019)

On 13 September 2017, the European Commission adopted a proposal for a regulation establishing a framework for screening foreign direct investment (FDI) inflows into the EU on grounds of security or public order. Officially the framework serves to enhance cooperation on FDI screening between the Commission and Member States, to increase legal certainty and transparency. However, the cases and relevant statistics shown in the official documents reveal that the EU mainly focuses on the capital from China’s enterprises.

As (for example) mentioned in “China’s International Behaviors” (Medeiros 2009), China tended to contact European countries individually rather than EU since 2005. The European Commission can do nothing when China only contacts the member states regardless of the EU’s requests. However, the EU’s decision making has been unusually efficient this time (see Figure 1): the EU level FDI screening mechanism will most likely be finished in 2019, less than three years since Jean Claude Junker’s statement of “we are not naïve free traders” in 2017.

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