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Facebook Moves into China, Subsidiary Opens in Hangzhou

Last updated on September 2, 2018

US social media giant Facebook has finally moved into China by setting up a subsidiary in the country, a move widely viewed as to ramp up its presence there although its social media sites remain blocked.

Facebook has opened an office in Hangzhou, home to the e-commece giant Alibaba, with a registered capital of US$30 million, according to the record of China’s National Enterprise Credit Information Publicity System.

“We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and start-ups,” the company said in an email, “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.”

Setting up a company-owned enterprise in China did not mean Facebook was changing its approach in the country, the company said, adding that it was still learning what it takes to be in China.

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.

The company’s shareholder is Facebook Hong Kong Ltd and its chairman is Damian Yeo, who is head of APAC Legal at Facebook.

About 10 per cent of Facebook’s global advertising revenue comes from China, according to a report by Pivotal Research analyst Brian Wieser. Wieser estimates Chinese advertisers will spend US$5 billion in Facebook ads in 2018.

Facebook’s Chinese business is conducted by its Hong Kong subsidiary. It works with local advertising agents and provides ads on its news feeds for Chinese companies that go global, Zhang Jian, a branding manager at Chinese marketing agency PandaMobo, told Chinese local media.

To woo the Chinese government, Facebook founder Mark Zuckerberg paid a visit to China in 2016 when he met Liu Yunshan, then the Central Secretariat of Communist Party in China, and ran through Tiananmen Square in smog without a mask.

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