
The European Commission is taking steps to enhance EU powers to screen inbound and outbound investment in strategic economic sectors, but reluctance from member states to increase pressure on China and cede powers to Brussels poses significant constraints. The European Commission on Jan. 24 unveiled a series of initiatives to "strengthen the EU's economic security at a time of growing geopolitical tensions and profound technological shifts." The proposals include new rules for screening foreign direct investment into the EU that will require all member states to have a screening mechanism in place, harmonize national rules, establish a minimum sectoral scope for investment screening to become mandatory and expand the scope of what investments should be scrutinized. The package also includes a series of recommendations to increase the coordination of export controls, support research and development on dual-use technologies, improve research security and develop an outbound investment screening mechanism.