When Meta agreed to acquire Manus, a Singapore-based artificial intelligence startup with Chinese roots for roughly $2 billion last December, many saw the transaction as just another routine deal in today’s global technology economy: capital crossing borders, startups relocating to friendlier jurisdictions, and major platform companies acquiring talent and intellectual property in the race to build the next generation of AI systems.
But for those who have been following U.S.-China strategic competition, particularly in the fiercely contested technology sector, the announcement should have raised yellow flags, if not red ones. What initially looked like a straightforward acquisition quickly became something far more consequential.
This week, Beijing ordered the deal reversed, and Meta has indicated that, for now at least, it will comply. Mark Zuckerberg may seek assistance from U.S. President Donald Trump during his anticipated visit to China, but for those who still view China as operating largely within a global economic system shaped by Western rules and institutions, episodes like this offer another bold reminder of how Beijing approaches technology, investment, and competition.
The Manus situation is simply the latest in a long line of developments that reveal how China intends to compete in these sectors. Antitrust law, investment restrictions, and regulatory authority are not instruments used exclusively by Western governments. Beijing has its own versions of these tools and has shown that it is prepared to use them just as forcefully when technological capabilities or national interests are at stake — in the Manus case, it is doing so in defense of an innovation ecosystem, a technology stack, and an engineering talent base it is determined to protect.
Formally, the decision to halt the transaction will likely be justified under China’s Anti-Monopoly Law. Regulators can argue that the law provides the legal basis for prohibiting foreign investment in Manus and requiring the parties to cancel the deal. Yet the sequence of events surrounding the acquisition makes clear that the issue was never simply about antitrust law.
Beijing has long treated advanced technology transactions as matters of national security, even when the legal framing rests in competition policy. Chinese officials reviewing the acquisition reportedly described it as a “conspiratorial” attempt to hollow out the country’s technology base — language should scare anyone seeking deals in this space. Regulators examined the transaction through multiple channels, including export control rules, foreign investment restrictions, and competition law. At one stage of the review process, authorities even restricted two Manus co-founders from leaving the country, according to the FT.
These are not typical features of a conventional antitrust inquiry. They reflect a government determined to prevent the outward transfer of technological capabilities it considers strategically important, particularly when those capabilities could benefit its principal geopolitical rival.
The episode becomes even more revealing when viewed in light of Manus’s earlier corporate move. Last summer, the company shut down its mainland China operations and relocated to Singapore. The restructuring was reviewed by Chinese regulators, including the National Development and Reform Commission. Officials initially concluded that the relocation did not warrant strict controls. The decision reflected a common pattern in China’s technology sector, where startups establish offshore corporate structures to access global capital while maintaining engineering talent and intellectual ties to the mainland.
‘Singapore washing’ won’t work
The move also reflects a broader phenomenon sometimes described as “Singapore washing.” In recent years, several Chinese technology firms have relocated corporate headquarters to Singapore seeking to present themselves as global companies rather than Chinese firms. The strategy allows startups to access international capital markets, reassure foreign investors, and sometimes soften regulatory scrutiny. But the Manus episode illustrates the limits of that strategy. Simply shifting corporate registration offshore does not place a company beyond China’s extraterritorial control and regulatory reach if its technology, founders, or research ecosystem remain tied to the mainland. What some entrepreneurs view as regulatory arbitrage increasingly looks, from Beijing’s perspective, like an attempt to move strategically important technology assets beyond state oversight.
The Chinese government’s determination to make sure this does not happen was made clear once Meta emerged as the acquirer. According to multiple reports, the decision to block the acquisition was elevated beyond economic regulators to China’s National Security Commission, the Communist Party body chaired by Xi Jinping that oversees national security strategy. The institutional distinction is significant. The National Development and Reform Commission is a ministerial-level agency of the State Council and functions as a central economic planning and industrial policy body within the Chinese government. The National Security Commission, by contrast, is not a state regulator but a senior Communist Party organ that coordinates national security strategy across the party-state system.
In China’s governing structure, the Communist Party sits above the formal institutions of the state, and party bodies ultimately shape the strategic direction that government agencies implement. When a transaction is elevated from review by a state economic agency to consideration by a party national security body, the calculus changes. At that level, decisions are evaluated through a broader strategic lens that integrates economic resilience, technological development, and geopolitical competition — narrow legal or economic considerations rarely determine the outcome.
In this particular case, legal justification will flow through China’s Anti-Monopoly Law, first enacted in 2008 and strengthened through amendments in 2022, and originally presented as a mechanism to ensure fair market competition. But it is important for foreign companies to know and understand that in practice, it has also become a flexible instrument of economic statecraft.
When Beijing wishes to shape the outcome of a transaction, signal displeasure, or slow the advance of foreign competitors in strategic sectors, antitrust enforcement has proven an effective tool. In 2018, Qualcomm’s $44 billion attempt to acquire Dutch semiconductor firm NXP collapsed after Chinese regulators declined to grant antitrust approval despite the deal clearing other major jurisdictions. More recently, Nvidia’s doomed effort to acquire the British chip designer Arm Holdings encountered regulatory scrutiny across multiple jurisdictions, including China, before collapsing under the weight of geopolitical and competition concerns.
Don’t expect to get back to China dealmaking
Antitrust law is only one element of a broader toolkit. Export controls, data security laws, and investment screening mechanisms increasingly function as instruments of a broader Chinese economic and geopolitical strategy tied to technology.
Many U.S. companies have been eager to get back to dealing and deal making in China, particularly its hot innovation sector. A period of what might be described as “opportunistic ambiguity” in Washington may have contributed to complacency surrounding deals like the Meta–Manus transaction. During the Biden administration, the United States articulated a relatively clear framework for strategic competition with China. Policies such as the “small yard, high fence” approach made explicit that advanced technologies like semiconductors and artificial intelligence would be treated through a national security lens in the United States — just like it is in China.
However, today the U.S. approach appears less clearly defined. That ambiguity has encouraged some investors and companies to believe that the era of geopolitics dominating cross-border economic activity may be receding. Eager for the return of what markets often describe as “animal spirits,” many have rushed back toward opportunities involving Chinese technology firms. Beijing has shown no such inclination. For China’s leadership, national security remains the organizing principle behind economic, technological, and regulatory decisions, particularly within its innovation ecosystem.
For multinational technology companies, the implication is clear. Deals involving Chinese talent, intellectual property, or technological capabilities will not be evaluated solely through commercial logic. They will be judged through the lens of strategic competition between Washington and Beijing. Corporate transactions in this sector should not be viewed as routine. There is no such thing as opportunistic ambiguity in China. Beijing still views the world through a largely geopolitical lens. U.S. companies that operate ignorant of this fact or disdainful of it do so at their own risk.
—By Dewardric McNeal, Managing Director and Senior Policy Analyst at Longview Global, and a CNBC Contributor
