Facebook plans innovation hub in China despite tightening censorship

NYT reported that China has withdrawn its approval for Facebook Inc’s plan to open a venture in Zhejiang. — Reuters pic

"We are interested in setting up [in the southern China city of Hangzhou] in Zhejiang [province] to support Chinese developers, innovators and startups", a representative of the company told Reuters.

The social media giant said the office in China would be the same as hubs it has set up elsewhere, such as in France, Brazil, India and South Korea. According to the screenshot, Facebook's Hong Kong company is listed as the sole shareholder of the new enterprise, while the registered capital is 30 million United States dollars.

The company, called Lianshu Science & Technology (Hangzhou), is established with $30 million of registered capital, according to China's corporate record database.

Facebook is as of now hindered in China.

China has withdrawn its approval for Facebook Inc's plan to open a new venture in the eastern province of Zhejiang, the New York Times reported on Wednesday, citing a person familiar with the matter.

Facebook founder and Chief Executive Mark Zuckerberg has been working hard in building a close relationship with China for the past 10 years, including visits to meet senior officials, and even posting a picture of himself running in smoggy Tiananmen Square in 2016. In the West, they tend to dominate the online landscape, but they have been blocked from making serious inroads into China's market.

Despite not having any product or office in China, Facebook still does booming business there.

"Facebook opening a research center in Hangzhou wasn't going to fast-track the entry of its main product to Chinese markets", Sheehan said.

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

Despite registration of Facebook Chinese subsidiary now, it seems very hard for the Silicon Valley enterprise to navigate China so easily. Facebook's ads are so in demand that China has been the company's largest source of ad revenue in Asia.

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.

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