China will cut U.S. investment in technology startups.

China Imposes Restrictions on Foreign Investment in Its Own Startups

*Traditionally the focus has been on U.S. bans, but now China is also limiting access to its capital.*

What Bloomberg Reported
The agency said that Chinese regulators plan to restrict local companies’ ability to accept investments from the United States without approval from state authorities. This decision is a reaction to a deal with American Meta Platforms, which last year bought the Chinese AI startup Manus for $2 billion.

How It Will Work
- Chinese companies must now report any offers from foreign investors and obtain permission from government bodies.

- Several private firms have already received warnings:

- Moonshot AI, preparing for an IPO,

- StepFun – an AI startup.

- Authorities also warned ByteDance (owner of TikTok) that it needs approval for a secondary share offering to U.S. investors.

Why It Matters
- The goal is to protect national interests and prevent technology leakage, especially in semiconductors, AI, and quantum computing.

- The United States has already imposed limits on investments in Chinese companies from these sectors, while China had previously encouraged its firms to enter the international market.

Implications for Manus
- The startup, founded in Singapore in March 2025, moved all staff back to China.

- Co-founders are barred from leaving the country after an investigation into the Meta Platforms deal began.

- These events highlight the growing complexity of Chinese companies going public and attracting foreign capital.

Conclusion

Bloomberg says the new restrictions could negatively affect China’s tech sector. While the country seeks to safeguard its key technologies, it simultaneously limits access to external capital, complicating further development and international expansion for its startups.