Facebook, Inc. (FB) Begins to Plant Roots in China

Kenny Grant
July 28, 2018

"We are interested in setting up an innovation hub in Zhejiang [province] to support Chinese developers, innovators and start-ups", the company said in a statement released to The Hill. Facebook has created similar hubs in France, Brazil, India and Korea to focus on training and workshops, the spokesperson said.

The only app Facebook-owned app that runs unhindered in China too was blocked at the beginning of September past year.

According to a filing on China's National Enterprise Credit Information Publicity System, Facebook's registration of a subsidiary in the city of Hangzhou, home to Alibaba, was approved by Chinese government regulators last Wednesday. The subsidiary is wholly owned by Facebook Hong Kong Limited.

Facebook is dipping its toe in the water in China. But in last week, it looked like changes in the country.

NYT reported that China has withdrawn its approval for Facebook Inc's plan to open a venture in Zhejiang. Chinese web users can not access search engines, news outlets, and social media sites such as Google, YouTube, and Twitter; instead they use Chinese equivalent sites such as Baidu, Youku and Weibo.

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Chinese social networking apps are now dominated by Tencent's WeChat, and QQ, each owning up to 1 billion users in China and overseas.

China strictly censors foreign news outlets, search engines and social media including content from Twitter Inc (TWTR.N) and Alphabet Inc's Google (GOOGL.O).

A company representative clarified that by establishing a company-owned unit in a blocked zone did not reflect that Facebook was modifying its approach towards China. The company did not disclose when operations in China would start. "China has wanted to control what gets into the public hands which has made Google and Facebook's entry hard there", Elazar Advisors analyst Chaim Siegel said.

Facebook CEO Mark Zuckerberg has made several efforts to build a relationship with the country through frequent state visits and meetings with Chinese leaders, including President Xi Jinping. Facebook's ads are so in demand that China has been the company's largest source of ad revenue in Asia.

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