China blocks Meta’s Manus acquisition using foreign investment security review

Beijing just reached into its regulatory toolkit and pulled out a weapon it has never publicly used before – an obscure national security review mechanism that is blocking Meta’s acquisition of Manus.

Some context: Manus is a Chinese AI agent startup that relocated to Singapore in June 2025. In December 2025, Meta acquired the company. 

• Beijing was never going to let that slide – and we flagged back in January that intervention was coming. 
• On April 27, China’s macro planner (NDRC) issued a one-sentence notice ordering parties to the Meta-Manus deal to unwind the transaction. 

Rather than invoking antitrust regulations or export controls, the NDRC has chosen to act through a little well-known mechanism: The Measures for Security Review of Foreign Investments.

• This regulation requires foreign acquisitions of Chinese companies in sensitive sectors to undergo a national security review before completion.

The picture is still coming into focus – and there are two open questions we’re tracking closely.

The first is jurisdiction. 

• The 2020 measures apply to transactions within the territory of the PRC – since Manus relocated to Singapore before the acquisition, the entity Meta purchased is not technically within Chinese territory.
• Beijing may argue that the original Manus parent entity still has an in-territory footprint that triggers the rules, or that the technology should never have been transferred abroad in the first place – effectively arguing China never lost jurisdiction. 
• The theory Beijing settles on matters enormously, because it will determine how broadly this precedent can be applied to other Chinese startups that have relocated overseas.

The second question is enforcement.

• If the measures determine an acquisition shouldn’t have proceeded, regulators can order the transaction to be unwound.
• If parties involved refuse, then the state can “order them to dispose of their equity or assets” and take further measures to restore the pre-investment situation – ominous in theory, but unclear in practice, particularly since neither Manus nor Meta is in China.

If Beijing wants to send a real message, it may need to mix and match the investment review rules with other regulations that carry heavier consequences, such as export controls with criminal liability.

However, a heavy-handed approach risks undermining China’s business environment.

• If companies can’t clearly determine what constitutes a prohibited “technology transfer,” risk-taking will slow, compliance costs will rise, and founders may become overly cautious or even opt for pre-emptive relocation.

The bottom line: The bigger picture here goes well beyond Meta and Manus.

• If Beijing cracks down too hard on tech companies moving abroad, it risks incentivising founders to avoid starting companies in China in the first place.
• But if Beijing lets this slide, what’s to stop more strategically important startups, like DeepSeek, from doing the same?

We’ll be tracking this closely for our Tech Daily subscribers – unpacking how Beijing’s regulatory thinking evolves and what it means for businesses exposed to China’s tech sector. 

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Kendra Schaefer, Head of Tech Research, Trivium China