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How "Singapore-washing" could be prevented if China blocks an AI deal

When does a Chinese AI startup cease to be Chinese? To legally and diplomatically separate itself from Beijing when it is headquartered in Singapore or anywhere else.
After China stopped a significant US acquisition on the grounds of national security, the technique known as "Singapore-washing" came under examination.
The agreement between Facebook owner Meta and the Chinese-developed, Singapore-based artificial intelligence agent tool Manus was banned, according to a statement released on Monday by China's top economic planning authority.
This followed a report that said two Manus co-founders were barred from departing China while the purchase was being reviewed.
AFP investigates what that implies here:

Singapore-washing: what is it?
Businesses "who seek a combination of funding overseas, a laxer regulatory environment, or to appeal to a global customer base without an explicitly Chinese image" relocate abroad, according to Wendy Chang of the Mercator Institute for China Studies (MERICS).
"As the US-China AI competition intensifies, Beijing has previously accepted this behaviour, but the Manus case represents a significant turning point, she told AFP.
The move signals "to its own tech leaders, more than to anybody else, that attempts to bypass national regulation will not be tolerated".
Shein, a massive online retailer, and TikTok, a Chinese-based subsidiary of ByteDance, are two other Chinese IT firms operating in the Southeast Asian city-state.
Chang stated that although Manus moved its activities to Singapore last year, "it's unclear whether it has moved the official registration as well, which may give Beijing more leverage."
AFP has requested comment from Singaporean authorities.

Is it possible to reverse the deal?
In December, Meta and Manus announced the acquisition, which was allegedly valued at about US$2 billion.
According to Meta, "we anticipate an appropriate resolution" and "the transaction complied fully with applicable law" on Monday.
Following the Chinese decree, the Wall Street Journal reported, citing persons with knowledge of the situation, that the US behemoth was getting ready to reverse its acquisition.According to Nicholas Cook, a lawyer at the legal firm Nixon Peabody CWL, "it may be difficult or even impossible to ultimately reverse this transaction."
But for Chinese regulators, "no matter the exact deal structure, sensitive AI technology seen as vital to China's national interests... has found its way into the hands of a major US tech actor".
""I think it's a secondary issue how much the Manus deal can actually be unwound," University of Southern California law professor Angela Zhang told AFP.
She said China's objective "is to set a precedent and to remind entrepreneurs that they should not transfer critical and sensitive technical know-how overseas without government approval".

What's involved?
Dylan Loh of Singapore's Nanyang Technological University stated that China seeks to stop "talent, tech data, capital" from leaking.
According to Chang at MERICS, the nation's AI engineers are a vital resource.She clarified, "The Meta deal was a 'acquihire', as much about absorbing the talent behind the startup as its technology."
According to other observers, the issue might be a negotiating tool between US President Donald Trump and Chinese President Xi Jinping.Beijing may have been aware of the prospect that other businesses, including a leading AI startup, could DeepSeek may eventually open offices elsewhere.
What will happen to other businesses next?
Chinese AI pioneers "would be well advised to think twice before following in Manus' footsteps," Cook cautioned.
Beijing has prohibited two Manus co-founders from leaving China while the review was under progress, according to the Financial Times last month.
According to Lizzi Lee of the Asia Society Policy Institute, "this case shows Beijing is not accepting your corporate identity at face value" for Chinese businesses who use other nations to access global markets."So if your tech, founders, or talent base are Chinese, then the company is still strategically Chinese, regardless of where it's incorporated," she said to AFP.
According to her, founders now have a crucial decision to make: either stay in China and grow locally, or actually move even sooner.