China Imposes Strict AI Export and Investment Controls

The Government of China has launched a sweeping crackdown on the export of artificial intelligence talent and technology, culminating in new State Council regulations signed by Premier Li Qiang on June 1, 2026. Effective July 1, these rules provide a legal framework for Beijing to force the unwinding of completed overseas transactions and ban unauthorized cross-border talent transfers in sensitive sectors.

This regulatory shift follows the government's order for Meta Platforms to unwind its $2 billion acquisition of Manus, a general-purpose AI agent startup. To facilitate the sale, Manus had moved its headquarters to Singapore—a practice Beijing now labels as "Singapore-washing." In response to the order, Manus co-founders Xiao Hong, Ji Yichao, and Zhang Tao are seeking $1 billion from investors to buy back the company and potentially launch an IPO in Hong Kong. During the review, Beijing barred two of the co-founders from leaving the country.

Beyond the Meta deal, China has expanded travel restrictions to senior AI professionals at private firms, including Alibaba Group and DeepSeek, requiring official approval for overseas travel to prevent brain drain. The government also plans to require sign-off before firms like ByteDance, Moonshot AI, and StepFun accept American capital. The new State Council decree further allows China to launch probes and adopt retaliatory countermeasures against foreign entities or countries that impose discriminatory restrictions on Chinese investors.