None of these countries have specifically named China and neither has India but the political intent is clear.
COVID-19 CASES
WorldIndiaConfirmed16,116Deaths519Confirmed2,317,759Deaths159,510NEW DELHI: The government’s FDI order, on the face of it, may appear to be a defensive move to keep China from taking advantage of the financial distress of Indian companies, particularly start-ups, but in reality it’s a big political signal to Beijing that New Delhi wants Indian business to stay away from Chinese money — reflecting both wariness and a lack of trust.
Why so? Because this has emerged as a shared sentiment among major powers amid this great war against Covid-19. US President Donald Trump, who has led a political campaign against China both domestically and globally before this crisis, has found greater resonance after the outbreak of the pandemic.
The US had begun to target Chinese investment two years ago through the Foreign Investment Risk Review Modernization Act, which brought sweeping changes in the laws enabling Committee on Foreign Investment in the United States (CFIUS).
As a result, CFIUS jurisdiction expanded manifold to include ‘non-controlling investment’ and real estate. It was given authority to suspend transactions and implement a new export control regime for emerging technologies.
While US actions did provoke a rethink in India too, the government never really went ahead with its plans despite a strong case. One of the reasons was that there was a lack of clarity at the global level.
Europe continued to hedge its bets on China while Beijing launched a counter to politically isolate Washington for its protectionist policies. At one point, it also seemed to gather some support. The pandemic has fundamentally altered that picture. It has removed the political haziness on China, bringing into question both security and reliability issues. So, here’s what happened in some major economies in the past month:
EUROPEAN UNION: On March 25, the EU Commission issued guidelines to coordinate an approach among member states for FDI screening with the objective of protecting key EU assets.
GERMANY: On April 8, the German government launched a legislative process to amend the German Foreign Trade and Payment Act so as to enable the government to ‘intervene and open’ a review procedure even if there’s a ‘probable impairment’ to national security. Earlier, ‘actual threat’ had to be established.
AUSTRALIA: The Australian Government in view of the pandemic announced that the dollar threshold for FDI screening will be zero dollars (A$0) from the night of March 29. It has also increased the timeline for processing FDI proposal to six months.
SPAIN: On March 17, the Spanish government enacted a Royal decree amending a 2003 Act, which makes it mandatory to obtain prior government authorisation on any FDI proposal. Any FDI without approval will have no legal effect.
ITALY: The Italian government expanded what it calls the ‘Golden Powers Law’, meant to restrict foreign investment in sensitive areas, on April 8 to include a large number of other sectors, from transport and financial sector to data storage.
None of these countries have specifically named China and neither has India but the political intent is clear. The pandemic has brought alive a nationalist impulse in these countries — along with sovereignty concerns — that’s fiercely questioning the nature of relationship with China. In this context, the almost synchronised distancing from China may well be the first tentative steps to forge a common position on how to preserve national sovereignty at a time when, oddly due the pandemic, Chinese economic might would be unparalleled.
Source: indiatimes.com
