Abstract:The UK,which has been a key destination for Chinese investment in Europe,saw during 2017-2018 what may become an overhaul in its approach and mechanism towards regulating capital inflow.While expanding the review for FDI in areas related to the military industry and advanced technology,the May government has been steadily moving towards more “long-term measures” of negating the traditional approach of “treating foreign and domestic investment alike” and establishing FDI review in Britain,which is consistent with major developed countries like the US,Canada and Australia. Though May has always been cautious about Chinese investment in the UK,she has become more pragmatic towards capital from China under the pressure of Brexit. Inbound investment from China during the past twelve months witnessed a record high,with technology being the most active sector. However,given that the latest policy updates have been targeting security implications in sensitive technology areas,whether enthusiasm in this sector will remain strong is yet to be seen. The two cases on which “national security” review was initiated for the past year,both of which are by Chinese investors,have indicated a rather rational approach so far. As “long-term” measures are expected to be finalized in early or mid-2019,Chinese companies investing in the UK,particularly those related to sensitive technology,are advised to prepare themselves with solid due diligence.
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