China bars Manus founders from leaving as Beijing reviews $2B Meta deal
China has barred Manus co-founders Xiao HongDealroom has a profile for this one. Try Dealroom → (also known as Red Xiao) and Ji YichaoDealroom has a profile for this one. Try Dealroom → from leaving the country while regulators scrutinise Meta's $2 billion acquisition of the AI agent startup.
The pair, both Singapore-based, were summoned in March 2026 to Beijing for questioning by the National Development and Reform CommissionDealroom has a profile for this one. Try Dealroom → over potential violations of foreign direct investment rules tied to Manus's onshore Chinese entities. No charges have been brought, and Manus is seeking legal help to resolve the matter.
China's Ministry of CommerceDealroom has a profile for this one. Try Dealroom → has been reviewing the deal since January 2026, assessing whether Manus's relocation of staff and technology to Singapore — and its subsequent sale to Meta — required an export licence under Chinese law.
The scrutiny intensified after regulators concluded that Manus may have bypassed domestic oversight by quietly winding down its Chinese operations, relocating its core team to Singapore, and laying off around 80 mainland employees — all before completing the sale to Meta. Beijing has described such deals as "selling young crops" to foreign buyers in strategic sectors, and officials appear determined to make an example of the case to deter others from following the same playbook.
In the most extreme scenario, regulators could seek to unwind the transaction — a messy outcome given that Meta has already completed the deal and begun integrating Manus's AI agent software into its platform.
Manus's Chinese affiliates, including Beijing Butterfly Effect Technology and its Wuhan-based subsidiaries, retain their onshore registrations, complicating any clean resolution. A Meta spokesperson said the deal "complied fully with applicable law," though no decision on whether to pursue drastic action has been made.
The case reflects deepening concern in Beijing about strategic technology flowing to geopolitical rivals — and its willingness to act on it. Manus had been a poster child for Chinese AI ambition: founded in 2022, it hit $100 million in annualised revenue within months of launch and inspired a generation of founders to pursue a similar global trajectory.
Its rapid rise — and now its regulatory entanglement — sends a clear message: the offshore reincorporation route that has become standard practice for China-born startups seeking Western exits is now firmly in Beijing's crosshairs.
Sources:
Reuters
The Business Times
The Financial Times
Bloomberg
The Information
J.V.
