Facebook sets up subsidiary in China despite censorship

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

The subsidiary is registered in Hangzhou, home of e-commerce giant Alibaba, 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 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 and Alphabet'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, US 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.

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.