Sunday, March 3

Facebook Establishes Subsidiary in China Despite Toughened Censorship

The social media major Facebook has established a subsidiary in China, where its sites have remained blocked in the country’s restrictive markets. A subsidiary is being set up for the purpose of creating an ‘innovative hub’ to support and encourage local start-ups and developers.

The subsidiary called Lianshu Science & Technology has been registered in the central Chinese city of Hangzhou and was set up with a registered capital of $30 million. According to the reports, the filing listed Facebook Hong Kong Ltd and no other entities as a shareholder. Zhang Jinghai has been named as the new company’s legal representative, on the other hand, David Kling and Susan Taylor are appointed as directors.

A Facebook representative stated that the new subsidiary is expected to give birth to an innovation hub which would host training workshops and support Chinese developers, innovators and start-ups. However, Facebook’s website still remains banned in China, where the foreign news outlets, search engines and social media including content from Twitter and Alphabet Inc’s Google is strictly censored.

“We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and start-ups,” the Facebook representative stated. “Facebook has created similar hubs in France, Brazil, India and Korea to focus on training and workshops.”

As per the recent filing of Facebook, the operations of wholly-owned Chinese subsidiary will include network information technology development and related services, investment consultancy and marketing planning. However, it did not elaborate on specific services.

The censorship controls in China have toughened under Xi Jinping, who was earlier appointed as the President in 2013, and since then U.S. technology companies with blocked content are rapidly looking for new ways to enter the market without facing the wrath of regulators.

Prior to the launch of the subsidiary, Mark Zuckerberg, Facebook chief executive and co-founder has made several high-profile visits to China with efforts to get Facebook unblocked in the country but failed. Now that he has come up with Lianshu Science & Technology, it might be interesting to watch whether the company will create a buzz in the Chinese market or not.