Economic security and global capital flows

How will evolving economic security trade investment measures affect global capital flows?

Research event, Roundtable Invitation only
12 December 2023 — 2:00PM TO 3:15PM
Chatham House and Online

Last August the White House announced a new executive order which would limit or ban US entities from investing in a range of Chinese tech sectors with military applications.

This follows a series of measures in G7 countries to tighten inward investment screening and controls, as well as the unprecedented financial sanctions adopted in response to Russia’s invasion of Ukraine. While capital controls are not new, the extent of controls being adopted under an economic security rationale is a new phenomenon.

These formal restrictions also have a ‘chilling effect’ on capital flows, arising from the fear that new constraints may be imposed in future, and the complexity of their interaction with constraints on trade in goods and services.
Given these developments, this hybrid roundtable considers three main questions:

  • How extensive are the economic security related capital controls already in place, and how far are they likely to go in future?

  • What economic effects are visible already (e.g., how far can the recent sharp fall in FDI in China be attributed to this) and what could the economic effects be in the future?

  • What are the most appropriate strategies and measures to respond to genuine national security concerns while limiting the economic fallout from restrictions on free movement of capital? 

This discussion forms part of the event series under the Chatham House Global Trade Policy Forum.

We would like to take this opportunity to thank AIG (founding partner), Boston Consulting Group (associate partner) and Diageo plc (supporting partner) for their generous support of the Forum.

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