Why Is China Reviewing the Meta–Manus Deal and Food Delivery Competition?

Recently, several high-profile but largely unrelated regulatory signals from China caught the attention of industry observers.

Chinese authorities said they would “assess and investigate” Meta’s acquisition of Manus, a multibillion-dollar deal announced just before the New Year. Around the same time, regulators also announced an “investigation and assessment” into competition in food delivery and quick commerce, coming just a day after Alibaba reiterated its commitment to invest aggressively until it becomes number one in market share.

Separately, media reports briefly surfaced last month about an altercation involving employees of Pinduoduo (PDD) and regulators at the company’s Shanghai headquarters.

Naturally, some readers have asked whether these developments signal a broader tightening of regulatory control in China – or even the possibility of a replay of the 2021 tech crackdown.

We think that interpretation overstates the case. A few observations may help put these events into perspective.

On Meta’s acquisition of Manus

1. Before a transaction of this scale is announced, both parties would have gone through extensive legal and compliance reviews. Potential exposure to China’s technology export control regime would almost certainly have been assessed, and the deal would not have been made public if the legal risks were deemed unmanageable.
2. Indeed, commentary from legal experts in China has largely focused on technical feasibility – what aspects of the transaction could face restrictions, and which are unlikely to. Some AI specialists have also pointed out that Manus builds on existing large language models rather than proprietary foundational technology, which could reduce the likelihood of export-related intervention.
3. However, when Chinese authorities issue carefully worded statements of this nature, the assessment is rarely confined to legal or technical dimensions alone. Transactions involving frontier technology are often reviewed through a broader policy and strategic lens, particularly when potential long-term implications are involved.
4. One such consideration may be the precedent this deal sets. If top-tier Chinese technology teams relocate overseas and subsequently are acquired by U.S. companies, how might that affect China’s longer-term objectives around technological self-sufficiency and domestic innovation capacity? These questions sit squarely at the intersection of industrial policy and national strategy –  and cannot be answered by legal analysis alone.

On the food delivery and quick commerce subsidy war

1. The current round of competition in food delivery and quick commerce was initially triggered by JD in early 2025, before escalating significantly when Alibaba entered the market with large-scale subsidies in the second quarter.
2. Over the past year, regulators have summoned major platforms multiple times, with discussions typically centred on food safety, rider welfare, and competitive boundaries. Official media commentary has remained deliberately balanced – acknowledging the role of platform competition in stimulating consumption, while also flagging potential risks.
3. This time, however, the signal was different.
4. The statement came from the Office of the Anti-Monopoly and Anti-Unfair Competition Commission of the State Council, a central government body under the cabinet, and was released in the formal format of a “response to media inquiries.” In China’s regulatory system, both the issuing authority and the communication format carry meaning. Read our interpretation here.
5. Market reaction was telling. On Monday (12 January), shares of both Meituan and Alibaba in Hong Kong rose more than 5% following the announcement – a sign that investors are eager to see the subsidy war de-escalate and competitive intensity normalise.

On the PDD incident

1. Public information about the incident involving PDD remains limited. What is known is that the company took swift internal action following the episode, dismissing several employees for procedural issues, after which one individual publicly protested what they described as unfair treatment.
2. This episode is unlikely to develop into a broader confrontation between the company and regulators. Reports about the incident did not continue to circulate widely in public channels, suggesting there was little appetite for escalation on the regulator side.
3. Two weeks later, PDD held a shareholder meeting at which co-CEO and newly appointed co-chairman Jiazhen Zhao reaffirmed the company’s commitment to investing “all-in” in China’s supply chain. This stance – alongside PDD’s continued investment in expanding ecommerce into rural and western areas – aligns closely with current policy priorities.
4. It is also worth noting that, in China’s labour and social context, public allegations around wrongful dismissal rarely lead to favourable outcomes for individuals, regardless of the merits of the case.

So what do all these mean?

Taken together, these developments do not point to a broad-based regulatory reset akin to 2021. Rather, they suggest more focused scrutiny around areas with strategic spillovers.

1. First, as we noted in our 10 Predictions for 2026, more Chinese GenAI teams are likely to establish operations in Singapore. Manus has become an aspirational reference point – even though few teams will command comparable strategic importance. At the same time, U.S. investors may face increasing complexity when backing prominent founders who retain Chinese citizenship.
2. Second, if the Alibaba-Meituan subsidy war does indeed pause, Meituan will have greater capacity to deploy capital and management attention toward overseas expansion, including ventures such as Keeta. Food delivery platforms across multiple markets should be prepared for the competitive implications.
3. Finally, through Temu, PDD has already tested global consumers’ tolerance for ultra-low price points across multiple categories. The company is now doubling down on supply chain optimisation to deliver even greater value at those prices. Ecommerce platforms in multiple continents will need to brace for this next phase of competition.