Facebook has just announced that it will be opening up an Innovation Hub in China, in an effort to support local tech talent. Now it's a bit surprising to see Facebook opening up a hub in China, considering the fact that Facebook and its apps (Instagram and WhatsApp) are all banned in China right now. This innovation hub is going to act as a subsidiary for Facebook, and according to the filing, it has a registered capital of around $30 million. The subsidiary is registered in Hangzhou, which is currently where Alibaba is located. Alibaba is China's biggest e-commerce player, even larger than Amazon.
According to a spokesperson at Facebook, that spoke with CNBC, Facebook is "interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and start ups. 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."
While Facebook is blocked in China, that doesn't mean that it can't do business in China and that's exactly what this filing is all about. Facebook, as well as other US tech firms that are also blocked in the country, are looking for ways to still do business in China and make money. China is such a lucrative country, because it is the largest country on earth, with 1.4 billion people living in the country. And for most US companies, it's an untapped market, which means expanding there can really boost its revenue and profit. Facebook may not be able to get its service unblocked in the country - especially since the censorship has gotten tougher since President Xi Jinping took over in 2013, but it can at least get a foot in the door and help build the future of technology. And that's exactly what this subsidiary will be doing in Hangzhou.