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14 Berkeley Bus. L.J. 1 (2017)

handle is hein.journals/berkbusj14 and id is 1 raw text is: Investing near the National Security Black Hole Ji Li* Multinational corporations dominate the global economy. Their aggressive business expansion has led to occasional conflicts with some sovereign governments' core interests. The most irreconcilable one is probably between foreign direct investments by multinationals and the need of sovereign states to safeguard their national security. his article empirically explores the tension in its most manifested case, i.e., the reactions of China-based multinationals to the highly confidential national security review system of the United States, also known as the Committee on Foreign Investment in the United States (CFJUS') review. Ifind that, contrary to conventional wisdom, most Chinese investors know little about CFIUS. The majority of those who have some knowledge about it consider the process politicized and non-transparent. A minority reported to have abandoned contemplated investments in the United States due to concerns with CFUS. Variations in the perception and the reactions of the China-based multinationals generally turn on their government ownership, sectoral sensitivity, and investment size. In addition, the recent landmark decision in Ralls v. CFIUS has a significant impact on the investors'perception of the system, but has not altered their filing behavior. The findings make several important theoretical and policy contributions. In tro d u ction ........................................................................................... . . 2 I.The Evolution of the CFIUS Regime .................................................... 3 II.L iterature R eview ............................................................................... 10 III.To File or Not to File?-The Foreign Investor's Decision Tree ......... 13 A . Pre-R alls Calculation ............................................................ 15 B. The D.C. Circuit Decision in Ralls Has Changed the C alcu lation ........................................................................ . . 18 IV. Chinese Investments under the CFIUS Regime ............................. 20 A. Chinese Investments in the United States ............................ 20 B. The Surveys of Chinese Companies in the United States ......... 21 C. Empirical Overview of the Survey Data on Chinese Investors and C F IU S ........................................................................ . . 23 DOI: https:Hdx.doi.org/10.15779/Z38FQ9Q496 * Associate Professor, Rutgers Law School; J.D. Yale Law School; PhD. Northwestern University; email: ji.li#law.rutgers.edu. The author would like to thank Stuart M. Benjamin, Jim Cox, Adam Chilton, Stuart Deutsch, Douglas Eakeley, Taja-Nia Henderson, David Noll, John Leubsdorf, Sabrina Safrin, Reid Weisbord, Huyue Zhang, Wei Zhang, and other participants of the 11 th Annual Conference on Empirical Legal Studies (CELS) at Duke Law School and the faculty colloquium at Rutgers Law School.

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