Although Beijing has indicated that the country is welcoming foreign investment, some strategic industries are likely to face attention.
A sign displayed in the main office of the artificial intelligence (AI) company Manus in Beijing, prior to its move to Singapore, was said to read, “Go big or die.” Its philosophy aligned closely with the well-known slogan of Meta’s founder, Mark Zuckerberg: “Move fast and break things.” In December, when itwas announcedthat the social media giant had acquired the Chinese startup for US$2 billion, many industry expertsembraced the dealDespite the intense technological conflict between China and the United States.
It was not meant to be. The competitive mindset that works in Silicon Valley might not be well-received in China.
Mainland regulators have vetoed the dealand insisted that both parties reverse it. As China achieves significant progress in artificial intelligence, robotics, and various other technological areas, decision-makers need to safeguard their intellectual property. After all, most groundbreaking technologies have typically received some kind of governmental funding or assistance.
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The United States has historically placed restrictions onchip exportsand technology transfers, not solely within its own regions but also via certain allied nations. It would find it difficult to protest since Beijing also possesses technology worth safeguarding.
When moving to Singapore, executives from Manus may have believed they could avoid China’s regulatory oversight. Some in the industry have started referring to it as the “Manus model,” a strategy for Chinese startups to secure international investment. Others, however, have more critically labeled it “Singapore washing,” a term that has not been well received by officials in the Lion City.
Due to the blocked sale, some sources have suggested that the Manus model is no longer viable. This might be too hasty. Beijing has publicly stated and expressed in media editorials that the country is receptive to global commerce and investment, although abrupt acquisitions in key sectors could encounter additional governmental review.
Although Manus has demonstrated remarkable progress in AI autonomy, including tasks like stock picking and crafting sales presentations, these capabilities are not considered fundamental technology. However, Chinese officials were reportedly concerned about the way and pace of the acquisition. It included Manus transferring its key assets to Singapore last year, a move that Beijing worries could be followed by other Chinese tech startups.
China must closely monitor transactions and transfers related to critical domestic technology, data, talent, and market access. It would be negligent not to do so. After all, Washington has consistently enforced strict regulations limiting American capital and technology transfers to prevent assistance in the advancement of Chinese AI and semiconductor industries. Chinese technology companies need to develop the ability to handle the growing complexities between global business operations and national security concerns. “Move fast and break things” is not a suitable approach, especially within China.
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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