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China ‘pulls approval’ for Facebook’s planned US$30 million ‘innovation hub’

A Chinese government database showed that Facebook had gained approval to open a subsidiary; the registration has since disappeared

PUBLISHED : Thursday, 26 July, 2018, 2:48am
UPDATED : Thursday, 26 July, 2018, 9:30am

The Chinese government has withdrawn its approval for Facebook’s plan to open a venture in the eastern province of Zhejiang, The New York Times reported on Wednesday, citing a person familiar with the matter.

Facebook said on Tuesday it planned to create an “innovation hub” to support local start-ups. The subsidiary was registered in Hangzhou, according to a filing approved on China’s National Enterprise Credit Information Publicity System last weekand seen by Reuters on Tuesday.

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A Chinese government database showed that Facebook had gained approval to open a subsidiary. The registration notice has since disappeared.

The decision to take down the approval came after a disagreement between officials in Zhejiang and the national internet regulator, the Cyberspace Administration of China, which was angry that it had not been consulted more closely, according to The New York Times.

The Chinese internet regulator was not immediately available for comment. Other Chinese officials could not be reached outside business hours. Facebook could not be immediately reached for comment.

Facebook’s venture would be similar to what it did in other countries like France, Brazil and Korea.

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“Having a wholly foreign-owned enterprise does not change our approach in China,” a Facebook spokesperson said on Tuesday after announcing the venture. “We are still understanding and learning the various approaches on what it takes to be in China.”

Facebook is the latest company to get caught in the crosshairs of rising US-China trade tensions. US chip maker Qualcomm’s proposed bid to buy NXP Semiconductors has also got stuck awaiting approval from Chinese regulators.

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. Its messaging app, WhatsApp is also blocked in the country.