The Industry

China Quickly Reverses Decision to Allow Facebook to Open Office in the Country

Facebook obtained a license to open a subsidiary in Hangzhou last week. Johannes Eisele/AFP/Getty Images

China has revoked its approval for Facebook to open a subsidiary in the city of Hangzhou, a day after news of the company’s plans to make inroads into the country attracted media attention, the New York Times reported on Wednesday. While this turn of events does not conclusively end the social media giant’s plans to establish its first office in mainland China, it does make the prospect quite a bit dimmer.

Facebook had quietly filed paperwork to build a startup incubator in Hangzhou and obtained a license from the government last Wednesday. Reuters reported on Facebook’s plans on Tuesday after discovering the filing on China’s National Enterprise Credit Information Publicity System. The subsidiary had a registered capital of $30 million, and Facebook Hong Kong Ltd. was listed as its only shareholder. “We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators, and start-ups,” a Facebook spokesperson told the Washington Post at the time.

Shortly after media outlets began disseminating the news, the filing was taken down from the government’s publicity system website. According to the New York Times, references to the subsidiary have also been censored on China’s social media platforms. An anonymous source informed the Times that government’s approval had been revoked due to conflict between officials in Zhejiang, the province in which Hangzhou is located, and the Cyberspace Administration of China. The administration, which serves as the national internet regulator, reportedly believes that there was insufficient consultation in the decision-making process.

The Chinese government banned the Facebook platform after the separatist Ürümqi riots in 2009. The company has been trying to re-establish its footprint in the country ever since. The news that Facebook was planning to open a subsidiary in Hangzhou had stoked some confusion as CEO Mark Zuckerberg had just last week said, in response to a question from Recode’s Kara Swisher about the company’s plans in China, “We’re, I think, a long time away from doing anything.”