The traditional international investment order, influenced by neoliberalism, advocates that host countries strengthen the protection of investors’ rights while weakening the security review of foreign investment. This is a structural product of capital-exporting countries safeguarding their overseas interests. However, the identities of traditional capital-exporting and capital-importing countries have become blurred in the process of economic globalization. This has led traditional capital-exporting countries to fear that foreign investment from traditional capital-importing countries would undermine their domestic social stability, economic security and technological development, sparking concerns that foreign investment threatens national security. To address the security risks posed by foreign investment, countries such as the United States and the European Union have revised their foreign investment security review systems, driven by security exceptionalism, arbitration protectionism, and legal instrumentalism. These efforts have restricted investor rights by expanding the scope of review, reducing transparency, and exempting foreign investment security review decisions from judicial review. This has disrupted the dual structural balance between host country regulatory power and investor protection within the foreign investment security review system, undermining the stability and predictability of the international investment order. In light of this, countries can safeguard host countries’ regulatory power over foreign investment by revising external restrictions, adjust the scope of national security to mitigate the risk of national security becoming generalized, reshape the principle of transparency to unveil the foreign investment security review system, reform the remedy model to strengthen the final barrier to investor rights protection, and promote the rebalancing of the dual structure of the foreign investment security review system with innovative concepts, pragmatic measures, and an open attitude. Meanwhile, China is in a transitional phase from a capital-importing country to a capital-exporting country. Under the guidance of the overall national security concept, it is necessary to improve the extraterritorial effectiveness of the foreign investment security review system. This can be achieved by strengthening investors’ right to know, refining the reporting mechanism of the Foreign Investment Security Review Working Mechanism Office, and improving the information disclosure mechanism to enhance the transparency of the foreign investment security review system. Furthermore, it is crucial to continuously optimize the jurisdiction system for foreign investment security review decisions to ensure investors have access to remedies. This will ensure that under the new development paradigm, China’s foreign investment security review system can both prevent systemic security risks in foreign investment and protect investors’ rights, thereby ensuring high-quality development with high-level security and ultimately forming a foreign investment security review system with Chinese characteristics.