Investment Screening Put to the Test of the Covid-19 Pandemic: Typology, Legality and Externality

Cheng Bian*

*Corresponding author for this work

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    The Covid-19 Pandemic has introduced or revived a concern in the
    foreign direct investment (FDI) context that was less emphasized
    pre-Pandemic, namely public health. This article discusses the
    typology of Covid-19 related FDI screening, expounds on the
    legality of these measures in the context of both national
    investment law and international investment law, and identifies
    the potential negative externalities to foreign investors and to
    the host state. Newly promulgated FDI screening measures
    intensify governmental intervention and scrutiny in cross-border
    takeovers in the health sector and beyond to protect domestic
    companies from being taken over by predatory foreign buyers.
    FDI screening during Covid-19 has become more comprehensive
    and inclusive in its scope than what was already considered a
    system capable of excessive and arbitrary use pre-Pandemic. FDI
    screening on grounds of public health may be justified for its
    legality under both national and international investment law,
    nonetheless certain conditions need to be satisfied. The negative
    externality of FDI screening during Covid-19 pertains to a concern
    that, if applied aggressively in practice, FDI screening might
    potentially result in a deterrence effect on the cross-border
    capital flow that is much needed for market revival after a global
    economic shutdown.
    Original languageEnglish
    Pages (from-to)380-401
    Number of pages23
    JournalAsia Pacific Law Review
    Issue number2
    Publication statusPublished - 2 Mar 2023

    Bibliographical note

    Publisher Copyright:
    © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.


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