Interviews | Economy | East Asia

What the SpaceX IPO Tells Us About China-US Competition

Insights from Winston Ma.

Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Winston Ma, Esq. — investor, attorney, author, and adjunct professor in the global AI-digital economy; partner of Dragon Global, an AI-focused family office; and adjunct professor and executive director of the Global Public Investment Funds Forum at NYU School of Law — is the 515th in “The Trans-Pacific View Insight Series.”

Describe the reasons behind the exclusion of investors from China and Hong Kong in the SpaceX IPO.

The most striking fact about the SpaceX exclusion is that it came from the American side, not from Beijing. Underwriters led by Goldman Sachs and Morgan Stanley were instructed in early June to reject all orders from mainland China and Hong Kong, citing ITAR [International Traffic in Arms Regulation] compliance on defense-adjacent aerospace technology. That order came a full week before the offering priced on June 11 at roughly $135 a share, valuing the company near $1.8 trillion and raising about $75 billion, the largest IPO in history.

In our 2020 interview, we discussed my book “The Hunt for Unicorns,” where I documented how CFIUS [the Committee on Foreign Investment in the United States] and FIRRMA [the Foreign Investment Risk Review Modernization Act of 2018] steadily expanded what counts as sensitive technology. Rather than risking a drawn-out, retrospective national security challenge that could complicate the deal after closing, SpaceX voluntarily executed an aggressive jurisdictional pre-clearance – private screening done before any regulator forced it. A U.S. company voluntarily excluding the world’s second-largest pool of investable capital tells you how normalized national-security self-restriction has become for any American firm with dual-use technology and global capital ambitions.

Explain the significance of Beijing’s State Council Decree 837 and Trade Secret Regulation.

Decree 837 was born from the Meta-Manus case – the first time Beijing ordered a completed transaction unwound under its foreign investment security review framework, establishing that re-domiciliation to Singapore does not sever China’s regulatory reach over technology it considers strategically Chinese in origin. Signed June 1 and effective July 1, it now codifies that principle into a formal 34-article structure governing outbound technology transfer. A parallel Trade Secret Regulation, the first major revision since 1998, newly classifies AI model weights, algorithms, and training data as protectable state assets.

As a lawyer admitted in both New York and China, I consider this China’s own “CFIUS moment”: the same substance-over-form logic Washington has long used to block inbound deals, now deployed by Beijing to control outbound ones. The “Singapore washing” strategy – relocate, reincorporate, then sell to a U.S. buyer – is now formally dead. Decree 837 is that conclusion arriving as statute.

Examine the content and impact of Xi Jinping’s January 30 Politburo speech published in Qiushi.

If Decree 837 is the defensive architecture, Xi’s Qiushi directive is the offensive........

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