Facebook’s Chinese Comeback Gets Stalled

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Facebook has surely seen better days. After the social media network’s stock tumbled by 20% and wiped out a whopping $120 billion, more bad news followed today. According to the latest tech news, Facebook’s ambitious plans to open an ‘innovation hub’ in China has hit a roadblock. Like other tech giants, Facebook has been blocked in China since 2009 but it seemed that things were about to change for the better. Earlier this week, the company released a statement that it had secured a license to set up an office to enable support for start-ups, innovators, and developers in China’s Zhejiang province. However just 24 hours later, reports began circulating that the filing documents had been removed from the register of companies.

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Why Did the Chinese Government Stall Facebook’s Plans?

While the exact reasons behind Facebook’s fallout with China remain unknown, speculations are rife about a disagreement between local officials from Hangzhou, Zhejiang and the Cyberspace Administration of China (CAC). The filing documents stated that Facebook’s office would be owned and operated by Facebook Hong Kong outside the Chinese jurisdiction, causing the CAC to object. The country’s internet regulator claimed that it had not been consulted on the matter.

A simpler explanation for the reversal of the development could be that Facebook has become collateral damage in the ongoing trade war between China and the United States. It has definitely been a tough week for Facebook, after its second-quarter revenues failed to reach the financial market forecasts.

How Does this Move Affect Facebook?

Although Chinese consumers would not be allowed to access either Facebook, Whatsapp or Instagram if the innovation hub came into being, the company would have strengthened its foothold in the country. Over the years, founder Mark Zuckerberg has made many attempts at courting Chinese officials, starting from studying Mandarin to collecting speeches of President Xi Jinping. At present, Chinese users are only allowed to access domestic government-monitored social networking sites such as Renren, Weibo and YouKu.

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Prior to the setback, Facebook had planned to invest $30 million to open offices similar to the ones already set up in India, Brazil, South Korea, and France. It aimed to focus efforts on conducting workshops and training for developers and entrepreneurs. After news of the approval being withdrawn began making rounds, consequently, the Chinese social media censored all filing and information relating to the operation.  This recent development is only the beginning of Facebook’s uphill battle against Chinese officials who are tightening their grip on the web by censoring both traditional and social media.

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