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The UK’s Foreign Investment Security Review Mechanism: Characteristics, Origins, and Responses

Author

Listed:
  • Shaotang Wang

    (School of Law, Nankai University, Tianjin 300350, China)

  • Lingyi Yang

    (School of Law, Shandong University, Qingdao 266237, China)

  • Guozhen Li

    (School of Law, Nankai University, Tianjin 300350, China)

Abstract

The UK’s National Security and Investment Act 2021, which came into effect in January 2022, marks the establishment of a foreign investment security review mechanism unique to the UK. This article examines the Act’s text and identifies several key features of the mechanism, including its broad review scope, ease of activation, flexible standards, and instrumental tendencies. Applying a constructivist framework, this article argues that the establishment of this mechanism is primarily driven by a shift in the UK’s identity, reinforcing its alignment with the United States while positioning China as a “competitor”. The NSI Act’s broad scope and discretionary powers disproportionately impact Chinese investors, given their concentration in high-risk sectors and geopolitical tensions. In response, this article proposes that China can mitigate the potential negative impact of this mechanism on its investors by adopting both conceptual and normative strategies, contributing to the reconstruction of the UK’s perception of China within the broader social context.

Suggested Citation

  • Shaotang Wang & Lingyi Yang & Guozhen Li, 2025. "The UK’s Foreign Investment Security Review Mechanism: Characteristics, Origins, and Responses," Laws, MDPI, vol. 14(2), pages 1-22, April.
    • Handle: RePEc:gam:jlawss:v:14:y:2025:i:2:p:24-:d:1630454
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