Facebook to break into China with tech hub

Zhu Shenshen
The US$30 million subsidiary is aimed at helping Chinese developers, innovators and startups.
Zhu Shenshen

Facebook Inc will open an innovation hub in China through a wholly-owned subsidiary registered in Hangzhou with investment of US$30 million, Shanghai Daily learned yesterday.

Facebook’s investment, along with newly announced research centers from Google and Apple, highlight China’s opening up and willingness to welcome overseas investment, including in the high-tech and Internet sectors, analysts said.

Announcement of the planned hub, to be called Facebook Technology (Hanghzhou), also drove  shares of advertising and marketing firms — likely beneficiaries of Facebook’s expansion into China — higher yesterday.

Hangzhou is also the home of Chinese e-commerce giant Alibaba.

“We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and startups,” a Facebook representative was quoted by media as saying.

The hub will probably start as an innovation accelerator, likely targeting the Chinese advertising market, according to media reports.

Facebook has created similar hubs in France, Brazil, India and South Korea to focus on training and workshops, said the company.

Overseas high-tech investment

Facebook is not alone among Silicon Valley giants to invest in China. In December, Google announced it would establish its first artificial intelligence lab in China. Google also launched an AI-featured mini-game on WeChat last week, the first mini-game offered by Google on China’s mainland.

Apple also announced recently it would set up several research centers in China, including Shanghai and Suzhou.

China welcomes to foreign investment, said the Ministry of Commerce recently.

Meanwhile, other firms including Microsoft, Amazon and SAP have invested heavily on the Chinese mainland, covering cloud centers, research hubs and funds to boost innovation.

Facebook and China

Although its service is not yet available on the mainland, Facebook’s chief seems to be willing to take efforts to connect Facebook and China.

Founder and CEO Mark Zuckerberg has visited China several times to attend forums like the China Development Forum, meet government officials and business partners and even jogged in front of Tiananmen Square. He is married to a Chinese American and is fluent in Mandarin.

Facebook and Chinese smartphone maker Xiaomi are cooperating on virtual reality device sales in the domestic market. The VR device carries both Xiaomi and Facebook’s Oculus logos.

Facebook’s hub will help developers and related firms, especially those looking to expand into overseas markets.

Bluefocus Intelligent Communications Group Co, with a subsidiary as Facebook’s advertising agent, surged the 10 percent daily cap to close at 5.89 yuan (US$0.87) yesterday. Sichuan Xun You Network Technology Co, whose clients include Facebook and Google, also hit the 10 percent daily cap to close at 36.49 yuan. Shenzhen Zqgame Co, which has published and distributed games overseas through Facebook’s platform, gained 5.24 percent to close at 11.84 yuan.

The gains compared with a 0.02 percent decrease in the Shenzhen stock index yesterday.

Facebook is inviting game developers to attend a conference in Chinajoy 2018 in Shanghai next month. It’s the first time for the giant to attend the country’s biggest game show, according to an email obtained by Shanghai Daily.

China’s game developers generated a revenue of US$8.3 billion in 2017, a 15 percent growth year-on-year which created a “gold” market, Facebook said in the email.

During the Chinajoy conference, Facebook will introduce its marketing platform for the gaming industry, through its gaming community with more than 2. 2 billion users.

Chinese game and e-commerce developers and firms, which have expanded overseas, have great potential in advertising business. They are attractive to Facebook, despite its service not being available on the mainland, analysts said.

Hangzhou is also the headquarters of NetEase’s game business. NetEase is China’s No. 2 gaming firm.

(Intern Zhan Jinyao contributed to this article)

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