Facebook explains why it's setting up a new hub in China

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Facebook explains why it's setting up a new hub in China
Facebook’s subsidiary in China will be an “innovation hub” to support local tech talent, according to a Facebook spokesperson.

“We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and start-ups,” the spokesperson told CNBC’s Julia Boorstin. “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.”

Reuters reported early Tuesday that the social media giant had set up a subsidiary in China with registered capital of $30 million, a filing on China’s National Enterprise Credit Information Publicity System showed.

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 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 and 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 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.

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