Foreign Investment and National Security Challenges in the Data Age: An Assessment of the Current Regime and Recommendations

Authors

Irene Yu

Abstract

This Note contributes to the growing literature that attempts to grasp the current landscape of international trade and investment norms and policies in the data age. Focusing on the disputes between the United States and China surrounding Chinese investment in American businesses that gather private user data, this Note adds to the argument that new challenges posed by the internet age and the use of private data have transformed current international trade policy and the national security exception regime. The U.S. government in the recent years has demonstrated little self-restraint in employing national security grounds to justify its interference with Chinese investment in American companies possessing significant private user data. There is also arguably a lack of remedies from international organizations like the World Trade Organization (WTO) due to the controversy surrounding the use of the national security exception clause.

The Commission on Foreign Investment in the United States (CFIUS), the central mechanism that the U.S. government relies on to regulate foreign investment on American businesses that possess significant private user data, may hinder cross-border transactions due to its expansive authority, coupled with a lack of transparency and accountability. The United States should provide greater transparency and accountability to CFIUS and consider data-localization law as a solution to facilitate foreign investment in American businesses of special concern.

Recommended Citation

Irene Yu, Foreign Investment and National Security Challenges in the Data Age: An Assessment of the Current Regime and Recommendations, 74 Hastings L.J. 959 (2023).
Available at: https://repository.uclawsf.edu/hastings_law_journal/vol74/iss3/9