An analysis said China is expanding the scope of its technology controls beyond its borders by tightening regulations on its own artificial intelligence (AI) corporations that have moved overseas. Authorities even blocked Meta Platforms' (hereinafter Meta) attempt to acquire Manus, a Chinese startup that moved its headquarters to Singapore, a move seen as formalizing an "extraterritorial control" stance that applies regulations to corporations that have relocated abroad.
According to China's state-run Xinhua News Agency on the 28th, the Office of Foreign Investment Security Review of the National Development and Reform Commission (NDRC) said on the 27th, "We have decided to prohibit investment in the acquisition of the Manus project by foreign capital and demanded that the parties withdraw the transaction." It did not disclose the investor or the specific reason for the investment ban.
Manus is an AI agent developer founded in China in 2022. The eponymous AI agent developed by Manus has been called the "second DeepSeek," drawing industry attention. In May last year, it received $75 million (about 110.5 billion won) led by a U.S. venture capital firm, and around June, a month later, it transferred its headquarters to Singapore. In July, it also closed its China office, but its core technology and personnel are still said to be based in China. Because of this, the transfer of Manus's headquarters has been interpreted as a move to avoid domestic regulations and geopolitical risks, and has been cited as a representative case of "Singapore washing."
Afterward, Meta, which owns Facebook and Instagram, announced in Dec. last year that it would acquire Manus for about $2 billion (about 2.949 trillion won), and in Jan. this year the Chinese government, which moved to review whether this transaction falls under technology export controls, ultimately decided to ban the investment. If a ban is decided, even investments already made must be restored to their original state. The state-run Global Times stressed that the authorities' investment ban was a "decision based on legitimate rights."
Foreign media interpreted the move as an example of Chinese authorities extending the scope of regulation on domestic technology corporations to overseas entities. Analysts said it goes beyond merely blocking individual transactions and strongly serves as a "warning" to corporations pursuing overseas transfer and sale in similar ways. Lianhe Zaobao explained, "In particular, the intent is to block corporations in sensitive areas such as AI from registering as Singapore corporations through restructuring and then pursuing similar transactions."
A professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore told Lianhe Zaobao, "The acquisition is highly likely to fall through, and Manus will be the biggest victim." Still, some say it is too early to conclude the direction of the transaction. According to Bloomberg News, some Manus staff have already moved to Meta and funds have also been transferred. In that case, there is a possibility the technology has been integrated into the acquiring corporation, making it uncertain whether the transaction can actually be restored to its original state.
Lianhe Zaobao said, "The impact of this matter on U.S.-China relations is expected to be limited," adding, "With the transaction size at about $2 billion, it is hard to compare with an issue like TikTok, and the likelihood that the U.S. government will officially protest to China is not high."