Xi tests China’s influence by blocking Meta’s acquisition of Singapore-based Manas

issued Tuesday, April 28, 2026 · 08:11 am — Updated Tuesday, April 28, 2026, 11:04 a.m.

[BEIJING] China has long sought to influence commerce beyond its own territory. Still, the company’s decision to pressure Meta Platforms to unwind its $2 billion acquisition of AI startup Manas is a step unlike anything the company has attempted before.

The country’s leading national planners decreed on Monday (April 27) that the agreement must be scrapped four months after it was signed. In doing so, it has targeted American tech giants with little or no business in China, as well as startups from China who have legally moved to Singapore.

Both companies have spent several months developing their business with the assumption that the deal was completed. The company’s employees have already moved to MetaOffice in Singapore, and executives have joined the US company’s high-profile AI team. Investors in Manus, including Tencent Holdings, Chin Fund and Hongshan, have already received dividends, sources said.

One of the big questions will be whether the Chinese government has the power to force an end to the Manus Accord, and if so, how. Meta was quick to react on Monday to the National Development and Reform Commission’s (NDRC) brief announcement, saying it complies with applicable laws and hopes for an “appropriate resolution”, but did not elaborate.

“The Manus incident illustrates the challenges of regulating Chinese-origin capital, talent and intellectual property as it flows overseas,” said Stephanie Kam, assistant professor in the China Program at Nanyang Technological University’s Institute for Defense Strategic Studies in Singapore. “The policy importance lies in the uncertainty this case reveals: When AI companies move overseas, what actually moves overseas?”

beijing long reach

Chinese regulators have long wielded far more power than regulators in most other countries. They cracked down on Alibaba co-founder Jack Ma, forcing the company’s financial arm, Ant Group, to halt its initial public offering days before it was scheduled to go public in 2020.

In a similar case to the Manus situation, the Chinese government forced Didi Global to cancel its 2021 IPO on the New York Stock Exchange, citing regulatory concerns. The large car rental provider was forced to delist in the US and has since been unable to list its shares on other exchanges. Its market valuation is approximately USD 17 billion.

The Chinese government’s push for Meta to reverse course on the Manus Agreement speaks to the depth of its concerns about the agreement and, more broadly, its control over AI development by startups across the country. Domestic critics say the sale robs China of valuable AI technology and hands it over to the country’s biggest geopolitical rival.

Still, it’s unclear whether the agreement can be withdrawn in any meaningful way. The startup has already shared code with Meta and is being integrated into the U.S. company’s services, one of the people said. Forcing Manas’ founders and investors to return to Meta risks accomplishing little more than giving U.S. companies free access to critical technology.

“Manus’ decision is largely symbolic and the transfer of capital and technology has been completed, so unwinding the contract is not practical at this point,” said Laila Khawaja, research director at Gabekal Technologies.

The Chinese government has little influence over Meta. Major services such as Facebook and Instagram are already banned in the country.

“Beijing’s remaining influence could control the cross-border movement of Manus executives and force their resignation from Meta,” Khawaja said.

The Chinese government had already begun tightening its surveillance of other tech companies following the Manus deal. In recent weeks, the NDRC and other agencies have told major AI startups, including Moonshot AI and Stepfun, that they should be denied capital from U.S. investors unless explicitly approved, Bloomberg News reported last week. Regulators decided to impose similar restrictions on ByteDance, which owns TikTok and is the country’s most valuable startup.

Liu Xu, a researcher at Tsinghua University’s Institute for National Strategy, said the Manus ruling marks the first time authorities have publicly announced a ruling using the foreign investment review mechanism in 15 years. Although it is impossible to determine the impact on other M&A transactions involving foreign companies, it is clear that transactions involving advanced technology will be subject to increased scrutiny, Liu said.

If Chinese companies in high-tech fields such as AI or highly valued companies are targeted for acquisition by foreign companies, such cases could be subject to strict security reviews, he said. “There is also a focus on transactions that could result in the loss of control of important patents or the transfer of technology into foreign hands,” he said.

Manus’ decision comes just weeks before US President Donald Trump and China’s Xi Jinping are scheduled to meet in a high-profile summit, where the two leaders are expected to discuss investment, access to technology, AI and trade. It’s unclear whether Meta’s acquisition is important enough for the U.S. administration to engage in negotiations.

severe warning

Meta terminated its deal with Manas as part of an effort to catch up with rivals such as Alphabet Inc.’s Google, OpenAI and Anthropic PBC. Manas was supposed to help Meta rise to a leading position in the field of AI agents, or services that use AI to perform tasks.

AI agents are autonomous, self-driven systems that can perform tasks such as taking research notes, analyzing inventory, and planning entire travel schedules without humans controlling their actions. These are now considered to be the key to making AI not only more productive, but also more profitable. Meta has spent billions of dollars fine-tuning its AI agents’ arsenal.

The real impact of the NDRC’s decision may not be on Manus, but on other Chinese technology entrepreneurs. Many Chinese tech companies have moved or are considering moving to Singapore to expand internationally, raise capital, recruit global talent and face less scrutiny from Communist Party regulators.

“This move serves as a stark warning to other Chinese startups and talent considering a ‘de-Chinaization’ template to access overseas capital and markets,” Gavekal Technologies’ Khawaja said. “Beijing supports global expansion, but wants to monitor these developments closely to prevent talent loss and technology leaks, which pose new challenges as China rises in various technology sectors.”Bloomberg