MOFCOM responds to Meta-Manus deal: it has to comply with China's law
Today, China’s Ministry of Commerce issued its first official response to the highly controversial Meta–Manus acquisition:
South China Morning Post reporter: Some media outlets have reported that China’s Ministry of Commerce is reviewing Meta’s US$2 billion acquisition of the artificial intelligence platform Manus to determine whether it involves violations of technology export control regulations. What is the Ministry’s response?
He Yadong: We have noted the relevant media reports. The Chinese government has consistently supported enterprises in carrying out mutually beneficial and win-win cross-border operations and international technological cooperation in accordance with the law. It should be noted that when enterprises engage in activities such as outbound investment, technology exports, cross-border data transfers, and cross-border mergers and acquisitions, they must comply with Chinese laws and regulations and fulfill the required statutory procedures. The Ministry of Commerce, together with relevant departments, will conduct an assessment and review of this acquisition to determine its consistency with laws and regulations related to export controls, technology import and export, and outbound investment. Thank you.
According to the Financial Times, MOFCOM had begun assessing whether the relocation of Manus’s staff and technology to Singapore and the subsequent sale to Meta required an export licence under Chinese law. Earlier, Cui Fan, a well-known Chinese trade law expert, had called on his personal blog for an investigation into whether the Meta–Manus transaction potentially violated China’s technology export control regulations.
MOFCOM’s response was clearly carefully worded. First, it emphasized the Chinese government’s support for domestic enterprises’ “cross-border operations and international technological cooperation” (provided that such cooperation is mutually beneficial and win-win).
Second, it underscored that Chinese enterprises engaging in activities such as “outbound investment, technology exports, cross-border data transfers, and cross-border mergers and acquisitions” must comply with applicable regulations. These areas fall respectively under the outbound investment review led by the National Development and Reform Commission (NDRC), technology export reviews administered by MOFCOM, data export security assessments overseen by the Cyberspace Administration of China (CAC), and cross-border M&A activities that may simultaneously fall within the jurisdictions of the State Administration for Market Regulation (from an antitrust perspective), the NDRC, and MOFCOM. Going forward, these authorities may strengthen coordination to jointly regulate Chinese legal compliance issues arising from such activities by domestic enterprises, in order to safeguard China’s technological security.
Finally, MOFCOM stated that it would work with relevant departments to assess the acquisition’s consistency with laws and regulations on export controls, technology import and export, and outbound investment. This indicates that while the investigation will be led primarily by MOFCOM, other agencies such as the NDRC and the CAC are also likely to be involved.
Since the Meta–Manus transaction, the Chinese government had remained silent. This first official statement—and the deliberate sequencing and careful phrasing it employed—reflects a difficult balancing act between not frightening away Chinese technology companies and talent, and preventing the outflow of China’s cutting-edge AI technologies developed through domestic R&D.
China may ultimately choose not to penalize Manus, particularly as the company appears to have fully disengaged from China. Nevertheless, the episode has clearly served as a wake-up call, with potentially far-reaching implications. Going forward, China may adopt certain necessary measures regarding the movement of technology and talent involved in the “cross-border operations and international technological cooperation” of domestic technology enterprises.