Official schizophrenia about foreign investment is rampant around the world: one minute overseas capital is essential to compete in the globalised economy, the next it is a threat to national security. Japan’s government is the latest to get the balance wrong by refusing to let The Children’s Investment Fund of the UK increase its stake in J-Power, an electricity utility, above 10 per cent. Worse still, by doing so it protects J-Power’s management from reasonable pressure to improve its performance.

Governments have legitimate concerns about energy security and a right, therefore, to judge who is a fit and proper owner of electricity generation. Foreign investors, however, cannot pick up power plants and take them home. While governments may want to screen out crooks, and may worry about direct investment by foreign states, they have complete authority to regulate what happens at power plants built on their own sovereign soil.