The News
Chinese authorities’ decision last week to block Meta’s purchase of the AI startup Manus has sparked outcry over Beijing cracking down on its cutting-edge businesses, purportedly sent chills through the country’s tech sector, and prompted fears that China may be walling its best entrepreneurs from leaving. In this reading, “Sinagapore-washing” — whereby Chinese tech used the city-state as a global launchpad — is over.
But a growing chorus of analysts and executives have a simpler explanation: Meta and Manus screwed up.
That distinction matters — for Singapore more than anyone else.
In recent years, Singapore has emerged as a winner of the US-China tech war, turning its neutrality into a lure for capital and companies from both sides of the divide. Beijing’s intervention in the Manus deal complicates that role, but it doesn’t necessarily end it: Chinese companies and foreign investors now just have to assume that Beijing’s and Washington’s red lines follow them into the city-state.
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Grady’s view
The stakes for Singapore are apparent the moment you land here.
At Changi Airport, visitors are greeted by giant banners advertising Alibaba’s Qwen open-source AI models. TikTok-owner ByteDance, meanwhile, occupies one of the city’s prime office towers, and ByteDance’s logo looms over a central business district packed with a growing number of BYD electric vehicles.
The reasons for Singapore’s appeal are manifold. For corporate giants that straddle China and the US, such as ByteDance and e-commerce company Shein — which moved its headquarters to Singapore in 2021 — the city-state offers a neutral hub between Washington and Beijing. For others, including many of China’s crypto founders, Singapore became an escape route from crackdowns at home. And for a growing number of Chinese tech startups, it offers access to global capital, speedy visa processes, and a welcoming regulatory environment at a time when competition in China is fierce and profits are harder to find.
The playbook has often been described as “Singapore-washing” — using the city-state to give Chinese-founded companies more of a global identity.
“Singapore-washing is supposed to be an intentional, operational-level strategy, which a lot of companies have done,” said Grace Shao, a China AI analyst and author of the AI Proem newsletter. “It was not really intended to be a last minute step.” In her telling, the manner of Manus’ exit from China was the first red flag that the company might run into trouble.
The company moved to Singapore in the summer of 2025, almost immediately after the US Treasury Department raised questions about a $75 million investment the AI firm received from the American venture capital firm Benchmark.
At the time, Chinese regulators were also likely wary of the move, especially given Manus’s work in AI. Beijing does not want companies built on China’s tech ecosystem and engineering talent to rebrand abroad and take valuable innovations with them. Still, Manus reportedly managed to secure approval for the move from Beijing.
What pushed Manus over the line came later. Less than six months after leaving China, it agreed to sell itself to Meta for $2 billion.
“The deal with Meta was quite bold,” said Kyle Chan, a China tech expert and fellow at the Brookings Institution. “Any normal person in this space would be aware of the risks and of incurring Beijing’s wrath.”
Meta’s role in the deal, meanwhile, raises questions about its own due diligence, and how fully it understood the risk that Beijing might intervene.
Meta did not comment on the due diligence it conducted on Manus prior to the deal, but in a statement to Semafor, a spokesperson said that “the transaction complied fully with applicable law” and that the company anticipates “an appropriate resolution to the inquiry.” Manus did not respond to Semafor’s request for comment.
For now, Meta appears unwilling to challenge Beijing’s decision and is actively preparing to unwind the acquisition, according to The Wall Street Journal. Two Manus co-founders have reportedly been barred from leaving China amid the government inquiry, and Meta may be reluctant to jeopardize the billions of dollars it generates from advertising revenue in China each year.
Room for Disagreement
Meta unwinding the deal would potentially show investors, executives, and policymakers that Beijing’s reach extends far beyond its borders — an assessment with huge implications for Singapore.
“The assumption was that once you washed your company through Singapore, you didn’t have to be beholden to China’s requirements. Manus AI has made it very clear that that’s not the case,” said Mohan Belani, a tech entrepreneur in Singapore. Already, Chinese AI companies including Moonshot AI, DeepRoute.ai, and StepFun are considering unwinding overseas holding structures in the wake of the Manus crackdown, The Information reported. DeepRoute.ai has offices in Singapore, its website states, while Moonshot AI and StepFun have both set up entities in the city-state, according to reports and corporate records.
Singapore’s appeal to Chinese tech founders will likely remain strong, given its access to foreign capital and the limits of China’s domestic market. But as Beijing’s reach extends into the city-state, companies will have to adapt to new red lines.
“The Manus episode introduces a new layer of diligence risk,” said Yinglan Tan, founder of Singapore-based venture capital firm Insignia Ventures Partners. The key question, he added, is no longer simply whether a company is registered in Singapore, but how Beijing and Washington might view a specific transaction.
“That is a harder question to answer.”
Notable
- Beijing is sending a new message to US investors with its crackdown on the Meta-Manus deal, Trivium China analysts argue: “Stay out of China’s critical sectors — especially AI.”
- China’s Manus block is a show of strength ahead of the upcoming Trump-Xi summit, the South China Morning Post’s former editor-in-chief wrote, suggesting Beijing “feels it has the upper hand in negotiations.”