According to a report by China Central Television (CCTV), on April 27, the much-anticipated Manus acquisition case reached its final decision. The Office of the Working Mechanism for Security Review of Foreign Investment (under the National Development and Reform Commission), in accordance with laws and regulations, issued a prohibition decision on the foreign acquisition of the Manus project, requiring the parties involved to revoke the acquisition transaction.
This acquisition case involves an international environment, critical technology, data security, and capital operations, and it triggered a national security review of foreign investment—a rare but highly typical scenario.
So, what signals does the prohibition of the Manus acquisition send, and what exactly is being prohibited?
First, the prohibition targets the non-compliant practice of enterprises engaging in "cosmetic whitewash-style overseas expansion."
In March 2025, Beijing Butterfly Effect Technology Co., Ltd launched Manus, which became an overnight market sensation. However, in June of that year, Manus relocated its global headquarters to Singapore, significantly downsized its domestic team, and completely ceased its services and operations in China.
In December 2025, Meta announced its high-profile acquisition of Manus for approximately US$2 billion. As an AI company that grew on the back of Chinese engineers and infrastructure, Manus sparked controversy when it abruptly "severed ties" with Chinese elements after receiving US investment.
A well-known industry lawyer noted that the Manus acquisition involves transferring AI business assets from within China to overseas entities and ultimately selling them to a foreign company, Meta. According to the Measures for the Security Review of Foreign Investment, even if the initial outward transfer occurred between related entities controlled by the founder, the subsequent transaction still falls within the scope of the security review of foreign investment.
According to the lawyer, Manus moved its headquarters to Singapore while its core business was still in China. Thereafter, the company gradually transferred key assets related to its core business overseas, such as key personnel and technology, while the domestic Manus entity was progressively decoupled from the core business, retaining only non-core operations. This entire process ultimately resulted in the overall transfer of the core business of the Manus group from China to overseas, triggering compliance risks in cross-border investment transactions.
Second, the prohibition addresses the security risks inherent in opening up.
The fundamental purpose of China's security review system for foreign investment is to balance openness with national security—a common practice in many countries worldwide. To ensure the effectiveness of regulation, national security review regimes generally adopt a "substance-over-form" approach, with proactive regulatory intervention when necessary. China's security review system is no exception.
Specifically, Manus's early research and development took place in China, and its technical team consisted of Chinese engineers. These key characteristics mean that the movement of its personnel, technology, and data inevitably has implications for China's interests. According to the Measures, such technology-related investment activities must undergo a security review in accordance with the law.
Expanding high-level opening-up and creating a new landscape of win-win cooperation have been incorporated into China's 15th Five-Year Plan (2026–2030). Law-based regulation is a necessary measure for orderly opening-up and is not contradictory to encouraging foreign investment in China. Development and security must be dynamically balanced and mutually reinforcing. The more open the economy, the more attention must be paid to security, and clear security boundaries provide reassurance for compliant foreign investors, enhance long-term confidence, and this is precisely a crucial embodiment of high-level opening-up.
(Source: CCTV News)
Related News:
Deepline | iQiyi's AI gamble: How a grand vision of digital doubles backfired
Deepline | Crossroads in front of DeepSeek's Liang Wenfeng: Talent, options, and becoming 'normal'
Comment