China’s recent decision to block Meta’s $2 billion acquisition of AI startup Manus marks a significant shift in how Chinese tech companies might approach international deals. This intervention has implications that extend beyond just one transaction; it may change the landscape for all Chinese firms looking to exit to Western markets.
In late April, China’s National Development and Reform Commission announced it would prohibit foreign investment in Manus, demanding that both parties cancel the deal. This was striking, especially since Manus had been registered in Singapore—a move that many Chinese tech firms had viewed as a way to bypass Beijing’s strict regulations.
Manus had relocated its headquarters from Beijing to Singapore last year after a successful funding round led by Benchmark Capital. Meta’s interest in the startup culminated in a proposed acquisition announced in December 2025, which was already in motion with Meta integrating Manus’s technology into its platforms. Yet, despite these developments, Chinese regulators stepped in.
The founders of Manus, Xiao Hong and Ji Yichao, faced consequences as well. They were reportedly summoned by regulators in March and forbidden from leaving China, according to various reports.
### Singapore: A Shift in Strategy
Singapore has long served as a favored destination for Chinese firms aiming to attract global investment and partnerships, thanks to its favorable tax laws and proximity to major venture capital sources. Major companies like Tencent and Alibaba have established significant operations there. Last year, Chinese entities surpassed American firms as the largest investors in Singapore.
This strategy, often referred to as “Singapore washing,” was based on the idea that relocating would allow companies to navigate around geopolitical tensions. Typically, this approach worked well, especially for smaller startups.
However, Manus was a notable exception. Its standout AI product gained immense popularity shortly after launch, leading to a waiting list of over one million users and revenues nearing $100 million. This visibility and success caught the attention of regulators.
### New Realities for Tech Entrepreneurs
According to HK Park, who advises on investment screening at a U.S.-based consulting firm, simply being registered in Singapore is no longer a safeguard against scrutiny by Chinese authorities. The National Security Commission reportedly viewed Meta’s deal with Manus as problematic, prompting the crackdown.
This situation suggests that entrepreneurs may need to consider relocating from China much earlier in their journey, before their companies attract significant attention. As one advisor remarked, “If you want to stay off the radar, you need to leave at an earlier stage.”
While the route through Singapore is not closed completely, it is now more challenging than in the past. Chinese business founders are likely becoming increasingly aware of these new hurdles.
