Facebook has secured a licence to set up a subsidiary in China, which will serve as an “innovation hub” to support local tech talent. The US firm is stepping up to break into the Chinese market despite its social media platforms remaining blocked.
The subsidiary has been successfully registered in the southern Chinese city of Hangzhou on 18 July, with an investment of US$30 million. It will be centered around startup development, technological services, marketing planning and investment consulting.
“We have done this in several parts of the world — France, Brazil, India, Korea — and our efforts would be focused on training and workshops that help these developers and entrepreneurs to innovate and grow.” a Facebook spokesperson told CNBC.
China is the world’s biggest yet restricted social media market. Access to foreign news outlets, search engines and social media is strictly censored. Popular websites and apps such as Twitter, Facebook, YouTube, WhatsApp and Instagram are blocked in the country.
Facebook’s social network has been blocked in China since 2009, and has since made several attempts to tap into the market. Last year, Facebook authorised a local company to release a photo-sharing app called “colorful balloons in China”. If the subsidiary opens, it will be the firm’s first formal presence in China.
However, if Facebook started introducing services in China, it would trigger questions about the censorship of content and sharing data with Beijing. The latter would be particularly tricky for the firm as it is under scrutiny by the U.S. government for its handling of user data.