WORLD: While the whole world is struggling with the Covid-19 pandemic which originated from Wuhan, China that has resulted in weakening of the economies globally, China seems to benefit out of the current economic crisis. 

As reports suggest that Beijing is on a buying spree owing to the coronavirus pandemic-induced economic downturn that many countries are facing, the world as a whole, is reconsidering relations with China in the face of increased investment in critical sectors by Chinese state-owned enterprises.

Countries around the world have been amending rules on foreign investments in critical sectors to ensure that their economies do not become vulnerable and exposed to foreign hands. India is the latest country to join the move to tighten the foreign investment norms to resist hostile business takeovers by China. 

The European Union was among the first to change foreign investment rules in the recent weeks. It was followed by many of its member states announcing restrictions on foreign investments to discourage “bargain hunting” by China. Germany, France, Italy, and Spain followed suit.

The biggest warning was for acquisitions in the healthcare sector.

Now, the news that doing the round is Australia, Canada, UK, America and India joined the world in restricting the advancement of China to invest in certain sectors.


On March 30, Australia temporarily tightened its rules on foreign takeovers on concerns that strategic assets could be sold off cheaply as a result of the decline in its economy amid the coronavirus crisis.


On April 18, Canada also tightened its foreign investment rules, scrutinising direct investments in Canadian companies related to public health or critical supply chains during the pandemic, as well as any investment by state-owned companies or by investors with close ties to foreign governments.

The goal was to “ensure that in-bound investment does not introduce new risks to Canada’s economy or national security, including the health and safety of Canadians,” a policy statement from Innovation, Science and Economic Development Canada said.


Similarly, the UK government is screening acquisitions in the military, dual-use, computing hardware, and quantum technology sectors.


America’s Committee on Foreign Investments in the US (CFIUS) is now playing an active role in screening potential takeovers on national security grounds.


The latest addition to the list is India. On April 17, the Government of India reviewed its FDI policy for “curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic”.