CCTV Reveals Why China Prohibited Meta's Acquisition of Manus
Recently, China's Foreign Investment Security Review Mechanism (under the National Development and Reform Commission) made a decision to prohibit investment in the Manus project by foreign investors, requiring the parties involved to withdraw from the acquisition transaction. This merger case involves international environment, key technologies, data security, and capital operations, triggering a foreign investment security review, which is rare but typical.
Today, CCTV News published an article revealing the signals released by the prohibition of the Manus acquisition case, and what exactly was prohibited?
Here are the details:
First, the prohibition targets the non-compliant practice of companies "washing themselves clean" before going overseas.
Manus, launched by Butterfly Effect Company in March 2025, quickly became a sensation in the market. However, in June of the same year, Manus' headquarters moved to Singapore, significantly reducing its domestic team and completely stopping services and operations within China. In December 2025, Meta announced the acquisition of Manus for approximately $2 billion. As an AI company that relied on Chinese engineers and infrastructure to develop, Manus' sudden "severance" from Chinese elements after receiving US investment sparked controversy.
A well-known lawyer in the industry told reporters that the Manus acquisition case involves the transfer of domestic AI business assets abroad and their eventual sale to the foreign company Meta. According to the "Foreign Investment Security Review Measures," even if the initial outward migration occurred between affiliated entities controlled by the founders, subsequent transactions will still be included in the scope of the foreign investment security review. Manus moved its headquarters to Singapore while its core business was still in China. Subsequently, the company also gradually transferred key personnel, technology, and other critical assets related to its core business abroad. At the same time, the domestic Manus company was gradually stripped of its core business, retaining only the existing operations of non-core businesses. The entire operation ultimately resulted in the overall transfer of the core business of the Manus group of companies from within China to abroad, triggering compliance risks in cross-border investment transactions.
Second, the prohibition targets security risks in the process of opening up.
The fundamental purpose of establishing the foreign investment security review system in China is to balance the relationship between opening up and national security. This is a common practice in many countries around the world. To ensure the effectiveness of regulation, security review systems in various countries generally adopt substantive penetration reviews and, when necessary, proactive regulatory intervention. China's security review system is no exception.
Specifically, Manus' early research and development was mainly conducted in China, and its technical team consisted of Chinese engineers. These key characteristics determined that the flow of its personnel, technology, and data would inevitably be associated with China's interests. According to the "Foreign Investment Security Review Measures," such technology-related investment activities should be subject to security review in accordance with the law.
Expanding high-level opening up and creating a new pattern of win-win cooperation have been written into China's "Fifteenth Five-Year" Plan Outline. Law-based regulation is a necessary measure for orderly opening up and does not contradict encouraging foreign investment in China. Development and security should be dynamically balanced and mutually reinforcing. The more open we are, the more we need to emphasize security, and clearly define security boundaries, so that compliant foreign investment can have "reassurance pills" and enhance long-term confidence. This is precisely an important manifestation of expanding opening up at a high level.