Facebook quietly sets up subsidiary in China despite hardening censorship

BEIJING (Reuters) - Facebook has set up a subsidiary in China with registered capital of $30 million, according to an official business registration, hinting that the U.S. firm may be ramping up its presence in the restrictive market where its social media sites remain blocked.

FILE PHOTO: A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes, France, June 20, 2018. REUTERS/Eric Gaillard/File Photo

The subsidiary 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.

The filing listed Facebook Hongkong Ltd and no other entities as a shareholder.

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.

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.

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 Inc 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.

According to Facebook’s recent filing, the wholly-owned Chinese subsidiary’s operations will include network information technology development and related services, investment consultancy and marketing planning. It did not elaborate on specific services.

Reporting by Cate Cadell, Lusha Zhang and Se Young Lee; Editing by Kirsten Donovan and Emelia Sithole-Matarise

(Original source)