China has taken the extraordinary step of blocking Meta's completed acquisition of AI startup Manus, ordering the Silicon Valley giant to unwind a $2 billion deal that had already closed—a move that signals a fundamental shift in Beijing's approach to foreign technology investments and marks a new phase in US-China tech decoupling.
The National Development and Reform Commission (NDRC), China's top macroeconomic regulator, announced Monday that it had "decided to block the foreign acquisition of the Manus project and require the parties to unwind the deal." The terse statement provided little detail but represented an unprecedented intervention in a completed transaction, raising questions about the enforceability of such retroactive regulatory actions.
The practical challenges are substantial. According to reports from Bloomberg, Manus employees have already integrated into Meta's AI division, and early investors including Chinese tech giant Tencent and venture firm HongShan Capital have received their distributions from the acquisition. How Meta can effectively "unwind" these completed transfers remains unclear.
In China, as across Asia, long-term strategic thinking guides policy—what appears reactive is often planned. The NDRC's decision centers on what Chinese regulators termed "Singapore-washing"—Manus's July 2025 relocation from Beijing to Singapore and announced closure of Chinese operations. Despite these corporate maneuvers, Beijing maintains the startup continues to rely fundamentally on Chinese talent and technology, keeping it within regulatory jurisdiction.
Chinese authorities have barred the two Manus co-founders from leaving the country, a significant escalation that suggests potential legal proceedings beyond the acquisition itself. This move recalls previous cases where Chinese regulators have detained executives during investigations into cross-border transactions, though typically before deals close rather than after.
