Kamal Ghorui
China’s decision to block Meta’s $2 billion purchase of AI startup Manus hasn’t just upended one deal. It may have quietly rewritten the rules for every Chinese tech company eyeing a Western exit.The National Development and Reform Commission announced in late April it would prohibit “foreign investment” in Manus and required the parties to cancel the transaction—an extraordinary intervention involving two non-Chinese companies, one of which was already registered in Singapore.Manus had moved its headquarters and core team from Beijing to Singapore last year, following a funding round led by Benchmark Capital. Meta swooped in December 2025, announcing a $2 billion acquisition. The deal closed. Meta had already begun integrating Manus into its ads management tools. Then Beijing stepped in anyway.The founders weren’t spared either. Co-founders Xiao Hong and Ji Yichao were summoned by Chinese regulators in March and subsequently barred from leaving the country, the Financial Times reported.
Singapore was never just a pit stop—it was a strategy
For years, relocating to Singapore has been the go-to playbook for Chinese companies wanting global capital and Western buyers. The city-state offers tax advantages, proximity to US venture money, and enough distance from Beijing to look international. Tencent, Alibaba, Huawei, and ByteDance all have major Singapore presences. Last year, Chinese companies overtook American firms as the biggest investors in Singapore.The strategy even has a name: “Singapore washing.” The idea was simple—redomicile, raise offshore, and sidestep the geopolitical noise. For smaller or less visible companies, it largely worked.Manus was neither small nor invisible. Its agentic AI product launched in March 2025 and went viral almost instantly. Invitation codes were trading for up to $15,000 on secondary markets. A waiting list crossed one million users. Revenue climbed close to $100 million. That visibility is precisely what made it a target.
Beijing’s message: The address doesn’t matter anymore
“Incorporating in Singapore is no longer a regulatory shield,” HK Park, who heads the investment screening practice at Washington-based advisory firm Crumpton Global, told the FT. “It’s merely an address that still requires national security vetting.”China’s National Security Commission had reportedly branded the Meta deal “conspiratorial”—a document circulated among senior Communist Party leaders that triggered the broader crackdown.Advisers now say the Manus case will push founders to leave China much earlier, before their companies become prominent enough to attract scrutiny. “If you want to go under the radar, you need to leave at an earlier stage,” Matthias Hendrichs, a Singapore-based adviser to AI companies, told the FT.The Singapore route isn’t dead. But it’s far narrower than it used to be—and Chinese founders know it.
