Why are China and Russia Investing in Norway? Part 2

By | October 16, 2021

When preparing for this to happen, it can also make other countries think twice before trying to use investment in this way. Knowing that we are being watched can have a deterrent effect. It’s a bit like metal detectors or scanning of luggage at airports: Most people can go straight through, but we have such things in place to detect those who want to do damage – and to deter.

It is therefore important to find out which investments can be risky, and then let all the others flow fairly freely to reap the benefits of investments. But it is not so easy to find this balance between openness and security.

4: Difficult dilemmas and important questions

How can we safeguard an open society and an open economy – which we have here in Norway and the Nordic countries – with all the benefits it provides, and at the same time secure our security interests?

This dilemma becomes even more difficult because there is no obvious right or wrong answer to what our security really is. What exactly are we to protect from the potential risks of foreign investment?

We must protect our country and the people who live here, among other things by having a defense that works. It is therefore quite clear that we must take extra care when foreign players want to invest in companies that work with the defense or weapons.

It is also quite clear that power supply, water, internet and such things are important for society to function, and that we must take care of them.

But what about roads, airports, trains and railways? How about securing jobs and that Norwegian companies can compete internationally? What about agriculture and forests? Environment? How important is this for Norway’s interests and security? Is it important enough to stop foreign investment?

In addition to these questions about how to define our interests, it is not easy to know exactly how to find and stop exactly the investments that can be risky.

5: How to control foreign investment?

Many countries are now working on systems that can control investment. This is done precisely to secure themselves and their national functions and interests. But there is a huge amount of investment coming from abroad, and you can not control everyone. So one has to sift out the investments that can be a risk.

So how do you do this?

What many countries have in common is that they make lists of particularly important sectors or national interests, or even specific companies. If foreign players want to invest in something that is on the lists, one simply has to ask about the law first. Then the investment is reviewed, to see if it is unproblematic, if it needs to be changed, or if you are not allowed and it is blocked.

6: Can we go too far?

The fact that we control investments from abroad is good, since states can use these as a means of force against our interests. Nevertheless, there is a danger of going too far when deciding which investments to control or stop.

Nationalism and opposition to globalization are increasing in many parts of the world. Examples are Donald Trump in the United States, the Brexit process in the United Kingdom , or the anti-democratic development in some European countries such as Poland or Hungary.

More countries are becoming more introverted. Then it is important that schemes that control investments from abroad are not misused to close the country. This is related to the difficult dilemmas above: How broadly should one define security and national interests? When will national security become a pretext for other goals? Should financial security be included? Where, then, is the line between economic nationalism and protectionism?

It should therefore be avoided that such schemes are used for other, domestic political purposes.

7: Control rules are most important

According to a2zdirectory, investments from China and Russia to Norway are increasing, and large and profitable companies often invest here. Such foreign investments are particularly important for the welfare of small economies, such as Norway. Norway, as a small country, depends on being a good place to invest.

At the same time, we see that many – both among politicians and in the population – are more skeptical of investments from countries such as China and Russia than from, for example, EU countries. Norway and many other countries are therefore currently working to establish or improve control of investments from abroad in order to filter out those who may be at risk, regardless of which country they come from.

So do we have cause for concern? Most foreign investment still comes to Norway from countries such as the USA, Sweden, Switzerland and the United Kingdom. Countries such as China and Russia still account for a fairly small share of investments in Norway.

Nevertheless, investments from countries with which we cannot have security cooperation can be a risk. If the investments take place in sectors that are particularly important to our society, or the amount of investments from such countries becomes very large, it can make us dependent on foreign actors or other states for society to move around.

So there is reason to be aware, but it is also important that we do not paint an enemy picture of some countries, and that we have clear and predictable control rules so that Norway can still be an attractive place for the investments we welcome.

We may risk that functions that are critical to our society are monitored and used against us