National security has become the key factor governing foreign investment in the US. That is the upshot of a bill that recently passed through Congress. Although the inter-agency Committee on Foreign Investment in the US (Cfius), has reviewed the national security implications of inbound foreign investment since the 1980s, it has tended to favour the benefits over the potential risks. But the new Foreign Investment Risk Review Modernisation Act (Firrma), which is driven by fears of a rising China and had bipartisan support, marks a shift. The act strengthens the role of the department of defence and the intelligence community in deciding who should, or should not, be allowed to invest in the US. It will also make it a lot harder for American companies to put money into the Middle Kingdom. The result will be significant changes in how companies raise capital and do cross-border business. Regardless of the dollar amounts involved, these shifts are among the most significant in 40 years...

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