Beijing's National Development and Reform Commission this week ordered the unwinding of Meta's $2 bn purchase of Chinese AI app Manus, sending a blunt signal to domestic founders and seed investors: keep cutting‑edge models onshore. The one‑line ruling left no detail but made clear that cross‑border exits for Chinese start‑ups will face heavy scrutiny.

The Manus team fled to Singapore in mid‑2025 after Benchmark injected a sizable round, prompting Chinese outlets to brand them “defectors.” Officials described the December sale to Meta as “conspiratorial,” and the reversal is expected to chill foreign capital, making it harder for early investors to realise returns and deterring the so‑called “Singapore‑washing” of Chinese tech firms.

Beijing’s push for self‑reliance, echoed in Xi Jinping’s call to “move faster” on science and technology, sacrifices openness for security. While state funds abound, the ecosystem still misses the expertise of U.S. venture firms. Travel bans on chief executive Xiao Hong and scientist Ji Yichao underscore a heavy‑handed approach that could drive talent away.

The NDRC’s foray into data, AI and chip regulation blurs lines with other ministries and contradicts its stated remit of macro‑level management. This escalation adds another hurdle to any U.S.–China tech cooperation and complicates global AI governance efforts. With decoupling now entrenched, collaboration between the world’s two leading innovation engines has become markedly more difficult.