A few days ago, China’s Foreign Investment Security Review Working Mechanism Office (National Development and Reform Commission) made a decision to ban investment in the Manus project acquired by foreign capital in accordance with laws and regulations, and required the parties involved to cancel the acquisition transaction. This merger case involves the international environment, key technologies, data security, and capital operations, triggering a foreign investment security review. It is rare, but very typical.
Today, CCTV News issued an article revealing what signal the Manus merger and acquisition was prohibited, and what was prohibited?
The details are as follows:
First of all, what is prohibited is the non-compliant practice of companies "going overseas in the bath".
In March 2025, Butterfly Effect Company launched Manus, which became an overnight success in the market. However, in June of that year, Manus corporate headquarters moved to Singapore, significantly reduced its domestic team, and completely stopped services and operations in China. In December 2025, Meta announced a high-profile acquisition of Manus for approximately US$2 billion. As an AI company that relied on Chinese engineers and infrastructure environment to develop, Manus suddenly "cut" with Chinese elements after receiving U.S. investment, causing controversy.
A well-known lawyer in the industry told reporters that the Manus merger and acquisition case involves the transfer of domestic AI business assets overseas and the eventual sale to the overseas company Meta. According to the "Foreign Investment Security Review Measures", even if the initial outward migration occurs between related entities controlled by the founder, subsequent transactions will still be included in the foreign investment security review perspective. Manus moved its headquarters to Singapore, while its core business was still in China at that time. Since then, the company has gradually transferred key personnel, technology and other key assets related to the core business overseas. At the same time, the domestic Manus company has been gradually divested from its core business, leaving only the stock operations of non-core businesses. The entire operation finally realized the overall transfer of the core business of Manus companies from China to overseas, triggering the compliance risks of cross-border investment transactions.
Secondly, what is prohibited is the security risk in opening.
The fundamental purpose of my country’s establishment of a foreign investment security review system is to balance the relationship between opening up and national security. This is a common practice in many countries around the world. In order to ensure the effectiveness of supervision, safety review systems in various countries generally adopt the practice of penetrating review that puts substance over form, and actively intervenes when necessary, and China's safety review system is no exception.
Looking specifically, Manus was mainly developed in China in the early days, and the technical team was made up of Chinese engineers. These key characteristics determine that the flow of its personnel, technology, and data must be related to Chinese interests. According to the "Foreign Investment Security Review Measures", such technology-related investment activities should undergo security review in accordance with the law.
Expanding high-level opening up to the outside world and creating a new situation of win-win cooperation have been written into the outline of China's "15th Five-Year Plan". Supervision in accordance with the law is a necessary measure for orderly opening up to the outside world and is not inconsistent with encouraging foreign investment in China. Development and security must be dynamically balanced and complement each other. The more open we are, the more we must pay attention to security and clarify the boundaries of security. Only in this way can compliant foreign investment gain "reassurance" and enhance long-term confidence. This is also an important manifestation of high-level expansion of openness.