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Facebook creates new China subsidiary despite ban and censorship



facebook ceo mark zuckerberg china xi jinpingChinese President Xi Jinping, left, talks with Facebook Chief Executive Mark ZuckerbergTed S. Warren-Pool/Getty Images

  • Facebook has created a new subsidiary in China.
  • The social network is currently banned in the country, which has strict internet censorship.
  • Just last week, CEO Mark Zuckerberg said Facebook is “a long time away from doing anything” in China.
  • In a statement, a company spokesperson said Facebook was launching an “innovation hub” to support local developers.

Facebook is dipping its toe in the water in China.

The US social networking giant has set up a subsidiary in China, according to an official business registration, hinting that it may be ramping up its presence in the restrictive country where its social media sites remain blocked.

In a statement, a spokesperson said the company was launching an “innovation hub” to support local developers.

The subsidiary, which has $30 million in registered capital, is registered in Hangzhou, home of e-commerce giant Alibaba Group Holding Ltd, 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 is blocked in China

Facebook’s website remains blocked 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.

And in an interview just last week, CEO Mark Zuckerberg said that the company was “a long time away from doing anything [in the country].”

He added: “I mean, at some point, I think that we need to figure it out, but we need to figure out a solution that is in line with our principles and what we wanna do, and in line with the laws there, or else it’s not gonna happen. Right now, there isn’t an intersection.”

Censorship in China is increasing

While censorship controls have hardened under Xi Jinping, who was formally appointed president in 2013, U.S. 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.

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