00:00China has moved here to block this $2 billion acquisition on the part of Meta for agentic AI startup Madness.
00:07But questions remain about how, really, if and how the deal can be unwound.
00:12It's almost six months, of course, after it had been, it was sealed.
00:16Nick Turgon, our China economy and government reporter is with us here to talk us through here.
00:20And what we know, good morning, and thank you, by the way, for joining us.
00:23What do we know so far about Beijing's decision here?
00:25Yes, David, the big decision was announced in just one sentence statement from China's National Development and Reform Commission, which
00:35is this powerful state planner.
00:37And specifically, it says the Office for Security Review of Foreign Investment has decided to block the investment and order
00:46the relevant parties to revoke and to unwind the deal.
00:50So this is a big surprise decision, but it's actually months in the making, because we know that, you know,
00:56Manus have been facing a lot of criticism for leaking crucial technology to China's top, you know, geopolitical rival, the
01:03United States.
01:04And back in January, China's Commerce Ministry already signaled that it was reviewing, investigating whether this deal actually complying with
01:12China's, you know, regulations and laws.
01:16And the regulations and laws are decided to include, like, expert control on technology and foreign investment.
01:21Actually, this is the first time in 15 years China has publicly announced that it's using this foreign investment security
01:27review mechanism, you know, to make such a decision.
01:31Ed, so the next question is how the decision will be implemented, right?
01:36A very, very short statement, very sharp, straight to the point.
01:40A lot of these things have to be unwind, right?
01:42Money's been paid, some employees are already working at the Meta offices.
01:46Let's talk us through the steps of, you know, how then this gets implemented.
01:49Yeah, David, this is actually really the crucial question here, right?
01:52Because as you said, right, the two companies, Meta and Manus, have been operating under the assumption that the deal
01:57has already been wrapped up.
01:59And this happened like four months ago.
02:00So, as you mentioned, Manus employees have already moved into Meta offices in Singapore.
02:05Its executives have already joined Meta's high-profile AI team.
02:09And the code, Manus has already shared its code with Meta, according to our colleagues' reporting.
02:14So, exactly what the Chinese authorities can do to force the deal to be unwound.
02:19And let's not forget that actually Meta doesn't have a lot of business exposure to China.
02:24Its main platforms, Facebook and Instagram, are both banned in China.
02:28But analysts have told us that one area that the Chinese authorities could potentially use as leverage is by restricting
02:35the movement of Manus executives
02:39and potentially forcing them to perhaps resign from Meta.
02:44And what is the message then that you think Beijing is sending here?
02:49Right.
02:49I think this big move is really a warning against other Chinese technology startups that if they ever wanted,
02:57you know, to move overseas to Singapore and to expand globally,
03:02they will have to get the approval of the Chinese government first, right?
03:07Because this is a classic ad of sort of killing the chicken to scare the monkey here.
03:12Because, you know, China has been ascending the innovative sort of tech sector for a long time.
03:18And now it's come to a point where Chinese developed technologies and systems are, you know,
03:25are being sort of chased by other, you know, foreign investors.
03:28So it sees itself as having this access to valuable technology and talents,
03:32that it doesn't want these important sort of sector to be linked to its foreign rivals without the consent of
03:39Beijing.
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