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Jul 24, 2018

Facebook using China subsidiary to support startups, despite apps and site being blocked

Mark Zuckerberg Photographer: Marlene Awaad/Bloomberg

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Facebook Inc.’s apps and websites are still blocked in China, but that’s not stopping the social media giant from trying to open a center in the country to support local startups.

Facebook (FB.O) set up a Chinese subsidiary, Facebook Technology (Hang Zhou) Ltd., earlier this month, according to a filing with the National Enterprise Credit Information Publicity System. The subsidiary, which was approved July 18, has registered capital of US$30 million, according to the filing.

Asked for comment, a Facebook spokesman said the company is looking into setting up an “innovation hub” in Zhejiang, a province south of Shanghai that’s home to the prestigious Zhejiang University and has hosted the country’s annual summit of global tech leaders. Reuters earlier reported the existence of the filing.

“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,” the spokesman said in a statement.

But in a sign of the difficulties in operating in the country, the registration appeared to be removed from the Chinese government website later in the day.

Facebook has long been keen to get back into China, which blocked access to the platform in 2009. The market represents the largest population of potential users the company still can’t reach. Local equivalents, like Tencent Holdings Ltd.’s WeChat, dominate the country’s internet landscape, and in many ways the mobile app revolution has moved faster in China than elsewhere.

Facebook even went so far as to build a tool that could geographically censor information in the country, the New York Times reported in 2016. But right now all it can do is sell ads to Chinese businesses who want to advertise outside of the country.

The filing lists Damian Yeo, head of the company’s legal team in Asia Pacific as the chairman of the new unit. David Kling, Facebook’s deputy general counsel and corporate secretary, is a director.