If Facebook started introducing services in China, it would probably face questions about whether to censor content or share data with Beijing. The latter could be a particularly tricky issue for the social network while it is under scrutiny by the United States government for its handling of user data.
Facebook’s chief executive, Mark Zuckerberg, said in an interview last week with Recode’s Kara Swisher that the company was “a long time away from doing anything” in China. He said Facebook was working on products for China “over the long term,” but added: “We need to figure out a solution that is in line with our principles and what we want to do, and in line with the laws there, or else it’s not going to happen. Right now, there isn’t an intersection.”
Facebook’s fortunes in China follow some progress here for Google, which has also seen its products slowly squeezed out of the market. Over the past year, the search giant has set up an artificial-intelligence research lab in China and introduced several services, including an A.I.-powered sketching game.
To court China, Mr. Zuckerberg previously pulled out all the stops, dining with China’s president, hosting a question-and-answer session in Mandarin at a Chinese university and even once jogging across a smog-choked Tiananmen Square. The company also quietly worked on a censorship tool and released a photo-sharing app in China, called Colorful Balloons, without putting its name to the service.
Despite not having any product or office in China, Facebook still does booming business here. The company sells ads across the world to Chinese companies and the Chinese government. Facebook’s ads are so in demand that China has been the company’s largest source of ad revenue in Asia.
The legal representative for Facebook’s new China subsidiary was the same employee who registered the company that launched Colorful Balloons: Ivy Zhang, Facebook’s chief representative and head of business development in China.
Also on the board of the new subsidiary with Ms. Zhang is William Shuai, Facebook’s China government affairs representative and a former government relations executive at the Chinese search engine Baidu and LinkedIn. Before holding those positions, Mr. Shuai was briefly a low-level official in the Chinese government.