The Big Screen: Mapping the Diffusion of Foreign Investment Screening Mechanisms

Danzman, Sarah Bauerle; Meunier, Sophie

doi:10.2139/ssrn.3913248

Cited by 16 publications

(17 citation statements)

References 21 publications

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“…• Networking opportunities via VC networks. 39 This knowledge transfer is a two-way street. VC investment in China has provided U.S. investors with critical insight into China's high-tech ecosystem.…”

Section: Understanding the Intangibles Attached To Vc Investmentmentioning

confidence: 99%

U.S. Outbound Investment into Chinese AI Companies

Weinstein¹,

Luong²

2023

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U.S. policymakers are increasingly concerned about the national security implications of U.S. investments in China, and some are considering a new regime for reviewing outbound investment security. The authors identify the main U.S. investors active in the Chinese artificial intelligence market and the set of AI companies in China that have benefitted from U.S. capital. They also recommend next steps for U.S. policymakers to better address the concerns over capital flowing into the Chinese AI ecosystem.

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Section: Understanding the Intangibles Attached To Vc Investmentmentioning

confidence: 99%

U.S. Outbound Investment into Chinese AI Companies

Weinstein¹,

Luong²

2023

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“…10 Several governments have contemplated limiting foreign ownership of domestic companies possessing significant proprietary technology. Some are developing investment-screening mechanisms intended to curb PRC-based actors' control of their national firms (Bauerle Danzman and Meunier, 2021;Lenihan, 2021). While inbound capital is often needed to develop these high-technology industries, governments perceive it as carrying intolerably high risks, both directly to the target companies and downstream to other firms with whom they exchange privileged technical information.…”

Section: Non-decision Decisions: Middle Powers Muddle Throughmentioning

confidence: 99%

Non-decision decisions in the Huawei 5G dilemma: Policy in Japan, the UK, and Germany

Krolikowski

Hall

2023

Japanese Journal of Political Science

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Huawei, the telecommunications company based in the People's Republic of China (PRC), has presented the governments of several middle powers with a policy dilemma. On the one hand, Huawei's affordable 5G network technology is attractive to telecommunications operators in these countries, which do not have domestic producers of this equipment. On the other hand, the U.S. government and intelligence agencies in other countries maintain that Huawei gear presents intolerable network security risks, a charge that the PRC government and Huawei forcefully reject as they insist Huawei merits access to foreign markets. Facing the question of whether and how to allow the installation of Huawei's 5G equipment in their domestic networks, the governments of Japan, the United Kingdom, and Germany have been caught between the competing demands of the two rivalrous superpowers and faced internal divisions among communities of government experts. At first glance, Japan, the UK, and Germany each appear to have responded to the Huawei dilemma in a different way. The Japanese government moved quickly and without formal announcement to exclude Huawei from its market, while publicly denying a ban. The UK government initially allowed Huawei to supply some of its national 5G infrastructure, but then reversed itself to ban the company's equipment outright after a U.S. regulatory change. The German government has yet to officially ban Huawei, but has taken successive steps to curtail the PRC company's continued involvement in its domestic networks. In spite of their apparent differences, the three national responses to the Huawei dilemma share a fundamental commonality: all amount to ‘non-decision decisions’ on the question of whether and how to allow Huawei to supply domestic 5G networks. In one way or another, each government avoided making policy decisions that were either explicit, definitive, or singular on the issue, but nonetheless reduced the likelihood of Huawei's participation in its domestic 5G infrastructure. After developing the concept of a ‘non-decision decision,’ we explain why these maneuvers are not isolated responses to a specific policy conundrum, but may presage a mode of middle power coping with competing demands from two increasingly rivalrous superpowers.

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“…What is novel about contemporary ISMs is their security, not economic, dimension (Bauerle Danzman & Meunier, 2023). The new regimes that have been recently created or tightened are aimed at reviewing the essential security interests that inward investment may negatively affect.…”

Section: What Is Investment Screeningmentioning

confidence: 99%

“…Many countries have adopted investment screening rules over time (Bauerle Danzman & Meunier, 2023). The United States created arguably the gold standard ISM through its Committee on Foreign Investment in the United States (CFIUS) and successive legislations since the 1970s, which have implemented a comprehensive cross‐sectoral review of inward investment.…”

Section: What Is Investment Screeningmentioning

confidence: 99%

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Naïve no more: Foreign direct investment screening in the European Union

Danzman

Meunier

2023

Global Policy

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This paper asks what explains the creation and comparative features of national Investment Screening Mechanisms (ISMs) in Europe. After providing a brief history and definition of ISMs, we provide descriptive patterns about the similarities and differences in the investment screening features of national ISMs in EU member states. We then explain differences in national screening policies by focusing on the role of public debt, Chinese investment, R&D expenditures and various geographic groupings. Finally, we make three policy arguments about the rise of ISMs in Europe: (1) ISMs have not been designed as protectionist instruments, (2) the politics of inward investment screening reflects a shift from economic to security logic in addressing the fundamental tension between the benefits and vulnerabilities of open markets and (3) the EU can use the 'commercialisation' of security to extend its own competence in the security sphere. We conclude by considering how the rapid expansion of investment screening in Europe could affect economic openness, as well as the role of the EU as a global actor.

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The Big Screen: Mapping the Diffusion of Foreign Investment Screening Mechanisms

Cited by 16 publications

References 21 publications

U.S. Outbound Investment into Chinese AI Companies

U.S. Outbound Investment into Chinese AI Companies

Non-decision decisions in the Huawei 5G dilemma: Policy in Japan, the UK, and Germany

Naïve no more: Foreign direct investment screening in the European Union

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