This Master's thesis examines the growing concern in Western states that has been sparked by their transition to major importers of foreign direct investment, particularly after China's transition to one of the world’s biggest exporters of capital. These former champions of economic liberalisation have resorted to more robust scrutiny of foreign investments especially after 2017. Since the Master's thesis is based on the premise that the international investment order is rooted in the North-South divide, it examines the connection between the legitimacy crisis of this order and the strengthening of investment screening in Western countries using the theoretical framework of Third World Approaches to International Law. The Master's thesis analyses the development of investment screening in Western countries, the constrains of its use in the international investment order and the (possible) reactions of foreign investors, using the case of the G7 and Chinese investors. It demonstrates that the expansion of investment screening in Western countries represents a reversal of histories, i.e., a backlash not dissimilar to previous policies of the global South. This reversal could increase the legitimacy crisis of the international investment order if the latter facilitates (especially) China's unfettered economic expansion to the global North. Addressing this reversal necessitates restoring states’ regulatory capacity in the field of foreign investment within international law.
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