Facebook takes another step into China

Social network sets up subsidiary in a country where its main product remains blocked

Facebook

Josh Ye

Published: 12:00am, 25 Jul 2018

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This article originally appeared on ABACUS

Facebook is making another small step into China.

The social network is blocked in the country, but it set up a subsidiary in Hangzhou, according to an official business registration. It says the new company, Facebook Technology, has one parent company with no other shareholders: Facebook Hongkong Ltd.

A Facebook representative told Reuters that the business will "support Chinese developers, innovators and start-ups" by providing training and workshops.

The choice of Hangzhou puts Facebook right in the backyard of one of China's tech giants: Alibaba, which is headquartered in the city.

(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)

Last year the New York Times revealed that Facebook was looking for an office in Shanghai, primarily to work on hardware -- a logical enough idea, given that virtually every major tech product is manufactured in China.

The report also noted that Facebook sells ads to Chinese companies hoping to sell to the rest of the world, with some of those sales handled by its office in Hong Kong. Moving Facebook closer to those advertisers also makes a lot of sense.

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But it comes a week after Mark Zuckerberg admitted that it'll be a long time before the social network is officially available in China.

He made the comments on a podcast with Recode's Kara Swisher, saying that regulators shouldn't break up Facebook because it would allow Chinese companies to step in and dominate -- companies who "do not share the values that we have."

The Facebook founder and CEO argued that it's in the interest of the United States to keep Chinese companies out. "I think you can bet that, if the government here is worried about — whether it’s election interference or terrorism — I don’t think Chinese companies are going to want to cooperate as much and aid the national interest there."

Zuckerberg has been courting China for a while. He's given speeches in Mandarin, visits the country often, and was even pictured with a copy of President Xi Jinping's book on his desk.

Despite that, the social network remains blocked in China. And its major messaging app, WhatsApp, is often blocked or disrupted to the point it's seen as unusable.

But Facebook has been making very small inroads into China. Last May it launched a Chinese version of the Moments app, called Colorful Balloons. Its unit Oculus also has a partnership with Xiaomi to build and sell VR headsets.

It's not the only American tech giant looking for a way back into a market it's not in: Google just released a game inside WeChat, part of its efforts to get back into China.

Google launches a WeChat mini game in China

For more insights into China tech, sign up for our tech newsletters, subscribe to our Inside China Tech podcast, and download the comprehensive 2019 China Internet Report. Also roam China Tech City, an award-winning interactive digital map at our sister site Abacus.

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