Investment Screening in Europe in Comparative Perspective

How do different multi-level systems control Chinese foreign direct investment (FDI)? While Chinese outward FDI is controversial, much of that attention has focused on the European Union (EU) and United States (US) with their respective investment screening programs. Focusing on four different federal systems – EU, US, Australia, and Canada – we examine the different efforts to regulate Chinese FDI which varies widely with respect to enforcement and scope, as well as the very different trade, investment, and political relationships each of the four has with China. To date, scholars who studied these issues in advanced economies have focused mostly on how they impact the EU or the US, and the development of EU and US investment screening mechanisms (ISMs). Yet what is missing is a cross-national comparison of dynamics to explain similarities and differences in policymaking responses to Chinese investments. Specifically, we believe it may be insightful to apply a multi-level governance perspective to this topic, since sub-national actors (e.g., US states) and EU member states likely have different perspectives on the benefits and risks of Chinese investment. We propose to include Canada and Australia in our study. Both countries are economically advanced democracies, have federal political systems that allow the application of the multi-level governance model for analysis, and have seen huge increases in Chinese FDI over the past two decades. We expect the results to provide insights into whether and how the national (and EU) level and subnational (and member state) levels towards Chinese FDI have similar challenges to that of other federal systems, as well as the impact on overall levels of FDI within and across polities. This paper could also fit "EU Policy-making" or "Economic Governance and Fiscal Policy" so we are open to consideration in either of those sections.