NATIONAL SECURITY UNBOUND:
U.S. INVESTMENT SCREENING FROM INBOUND TO
OUTBOUND
JULIEN CHAISSE*
ABSTRACT
This Article addresses the evolving concept of national security within the
framework of U.S. foreign economic policy, with a specific focus on the introduc-
tion of the National Critical Capabilities Defense Act (NCCDA) of 2023. The
problem it tackles is the increasing risk to national security posed by outbound
investments. This risk is especially significant in light of technological advance-
ments and economic interdependence, which have not been adequately
addressed by traditional national security measures that are focused primarily
on inbound investment screening. This issue is significant and novel because
it represents a conceptual reorientation in the legal approach to national secu-
rity, expanding its scope to include economic and technological dimensions that
are crucial in the context of global geopolitical tensions, particularly with
China. The inauguration of President Donald Trump in 2025 underscores the
enduring significance of this transformation, as the new administration con-
tinues to prioritize national security in foreign economic policy. This Article
demonstrates how the NCCDA and subsequent legislative and executive actions
mark a strategic pivot in U.S. policy, aiming to prevent outbound investments
from enhancing the technological and military capabilities of potential adversa-
ries. This doctrinal evolution is shown to blur the lines between economic policy
* Professor, School of Law, City University of Hong Kong, and Chairman, Asia Pacific FDI
Network (APFN). The author acknowledges the support from the research grant “Domestic
National Security Regulation and Foreign Investment,” under the Germany/Hong Kong Joint
Research Scheme, with Christoph Herrmann as co-investigator, funded by the Hong Kong SAR
Research Grants Council (RGC) and the German Academic Exchange Service (DAAD) (RGC Ref
No. G-CityU102/22). Special thanks are extended to Dr. Patrick Abel, Dr. Georgios
Dimitropoulos, Dr. Christoph Herrmann, Dr. Jeanne Huang, Mr. Divij Kumar, Mr. James Losari,
Dr. Kehinde Folake Olaoye, Dr. Xueji Su, and Dr. Xueliang Ji for their insightful comments and
suggestions. Appreciation is also conveyed for the valuable feedback received from participants at
the conferences “Domestic Investment Laws & Investment Screening Mechanisms” (University of
Athens, January 2023), “National Security Regulation and Foreign Investment” (Passau
University, June 2023), and “WTO and International Economic Law in the Liberal International
Order’ (Harvard Law and International Development Society at Harvard University, April 2024).
Finally, the author is thankful for the constructive criticism offered by the editors, anonymous
reviewers, and staff at the Georgetown Journal of International Law, significantly enhancing this
Article’s quality. V
C 2025, Julien Chaisse.
425
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
and national security, introducing a preventive approach to national security
threats. The importance of this Article to national security scholarship lies in its
detailed analysis of how the United States is redefining national security to
include the safeguarding of economic prowess and technological edge. This rede-
finition has significant implications for the norms governing both domestic and
international economic activities, challenging traditional tenets of globalization
and necessitating a reassessment of international economic cooperation mecha-
nisms. The Article argues that this approach sets a precedent that could reshape
global norms and practices around investment and trade, underscoring the
interdependence of economic strength and national security in contemporary
geopolitical strategy.
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
II. DISENTANGLING THE COMPLEXITIES OF THE U.S.-CHINA ECONOMIC
RELATIONSHIP: TENSIONS AND IMPLICATIONS . . . . . . . . . . . . . . . . 434
A. Origins of the U.S.-China Economic and Political
Relationship: A Historical Analysis . . . . . . . . . . . . . . . . . . 435
B. Interdependence and Frictions: The Evolution of the U.S.-
China Economic Relationship. . . . . . . . . . . . . . . . . . . . . . 445
C. Escalation of U.S.-China Trade Tensions: A Legal and
Policy Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
D. Back to the Future: Are We Nearly There Yet? . . . . . . . . . . . 453
III. THE NCCDA: AN ASSESSMENT OF ITS OBJECTIVES AND
IMPLICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456
A. Normative Assessment of the NCCDA. . . . . . . . . . . . . . . . . 458
B. The Objectives of the NCCDA . . . . . . . . . . . . . . . . . . . . . . 462
C. The Politics of the NCCDA . . . . . . . . . . . . . . . . . . . . . . . . 464
D. Legislative Developments and Procedural Advancements of
the NCCDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469
E. Legislative Analysis of the Executive Order to Restrict U.S.
Outbound Investment in Certain Tech Sectors in China . . . . 471
F. Legislative Development of the New Executive Order Seeking
to Protect Americans’ Sensitive Personal Data . . . . . . . . . . . 476
IV. SAFEGUARDING NATIONAL SECURITY AND PUBLIC ORDER: A
COMPARATIVE STUDY OF INVESTMENT SCREENING MECHANISMS . . . 480
A. CFIUS Procedures and Congressional Involvement: A
Critical Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
B. A Comprehensive Look at Investment Screening Mechanisms
in the Global Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . 483
C. Outward Investment Screening Mechanisms Worldwide. . . . 484
V. TRANSNATIONAL LAW AND THE POTENTIAL ECONOMIC AND
COMMERCIAL TENSIONS BETWEEN THE UNITED STATES AND CHINA 487
426 [Vol. 56
1. This Article centers on the conventional meaning of “national security,” which relates to a
country’s defensive stance and protective reaction to external dangers. According to Robert
Jackson’s work, “The Global Covenant: Human Conduct in a World of States,” national security
denotes a state’s efforts to safeguard its territorial integrity, citizens, and sovereignty from outside
threats. National security is a crucial component of a nation’s foreign and domestic policy. It
entails measures taken by the government to ensure the country’s safety, stability, and prosperity.
It is a broad concept that encompasses various elements, including military strength, economic
development, political stability, and social harmony. National security has been defined and
redefined over time, depending on the changing security environment and the state’s priorities.
In essence, national security is an all-encompassing approach to protecting a nation’s interests
and ensuring its survival. It is a fundamental responsibility of every government to safeguard its
citizens and territory from potential harm, whether from external or internal sources. Achieving
and maintaining national security requires a coordinated and multi-faceted approach that
involves various agencies and stakeholders, including the military, intelligence community, law
enforcement, and private sector entities. See ROBERT JACKSON, THE GLOBAL COVENANT: HUMAN
CONDUCT IN A WORLD OF STATES 186 (2003).
2. U.N. Conf. on Trade & Dev (UNCTAD), The Evolution of FDI Screening Mechanisms: Key Trends
and Features, 25 INV. POL’Y Monitor 1 (2023).
3. Id.
U.S. INVESTMENT SCREENING FROM INBOUND TO OUTBOUND
A. Unilateralism and National Security in the NCCDA of 2023 488
B. The America COMPETES Act: Potential Economic
and Commercial Tensions Between the United States and
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489
C. The Legitimacy of the Emergence of Outbound Investment
Screening in U.S. Law from the Perspective of International
Economic Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491
VI. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496
2025] 427
I. INTRODUCTION
The intersection of national security and international investment
has become a paramount concern in global economic governance.
Historically, nations have conducted national security reviews on for-
eign investments to safeguard sensitive industries and technologies.
1
Since 1995, almost thirty-seven countries have introduced a regulatory
framework for the screening of inward investments on national security
grounds.
2
This trend accelerated after the global economic crisis, peak-
ing during the COVID-19 pandemic when surrounded by heightened
concerns regarding potential foreign takeovers in sensitive sectors.
3
The number of developing countries that have implemented outward
foreign direct investment (FDI) promotion mechanisms has expanded
