Facebook quietly (shhh!) sets up China subsidiary despite ban

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Image credit: Pan Xunbin / Shutterstock.com

BEIJING (Reuters) – Facebook has set up a subsidiary in China with registered capital of $30 million, according to an official business registration, hinting that the US firm may be ramping up its presence in the restrictive market where its social media sites remain blocked.

The subsidiary is registered in Hangzhou, home of e-commerce giant Alibaba Group, according to a filing approved on China’s National Enterprise Credit Information Publicity System last week and seen by Reuters on Tuesday.

“We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and start-ups,” a Facebook representative said via email.

Facebook’s website remains banned in China, which strictly censors foreign news outlets, search engines and social media including content from Twitter and Google.

Having a wholly foreign-owned enterprise in China does not change Facebook’s approach in the country, the company said, adding that it was still learning different approaches on what it takes to be in China.

Last year Facebook’s messaging app WhatsApp was also blocked in the run up to the country’s twice-a-decade congress, and it has remained mostly unavailable since.

The filing listed Facebook Hongkong Ltd and no other entities as a shareholder.

While censorship controls have hardened under Xi Jinping, who was formally appointed president in 2013, US tech firms with blocked content are increasingly looking for new ways to enter the market without drawing the ire of regulators.

Google has several hundred staff in China, and recently launched its own artificial intelligence (AI) lab. It has also tentatively launched several apps for the Chinese market in recent months, including an AI drawing game and file management app.

Apple has also heavily modified its app stores to fit Chinese censorship restrictions in the past year, removing hundreds of apps at the request of regulators.

Facebook said its Chinese subsidiary will focus on training and workshops that will help software developers and entrepreneurs to innovate. The company has similar hubs in many countries including France, Brazil, India and Korea.

(Reporting by Cate Cadell, Lusha Zhang, Se Young Lee and Jonathan Weber; Editing by Kirsten Donovan and Emelia Sithole-Matarise)

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