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Facebook enters China; turns to local talent for ‘innovation’

Facebook (FB) is the latest among the American companies trying to gain a foothold on Chinese soil, after the recent escalation of tariff dispute between Washington and Beijing. Recently, the tech giant received the green signal from the Chinese authorities to launch a subsidiary there.

A filing with Chinese regulatory agency National Enterprise Credit Information Publicity System, which went viral this week, shows Facebook is planning to kick-start its Chinese operations by setting up an innovation center in the Zhejiang province, which will find and nurture local talent.

The company claims that Chinese start-ups, innovators, and developers could make use of the new facility, which is being developed on the lines of similar initiatives in other countries like India, Brazil and France. The key operations will be investment consultancy, marketing planning and development of network information technology and related services.

Facebook is planning to kick-start its Chinese operations by setting up an innovation center in the Zhejiang province

It assumes significance considering the ban imposed by the Chinese authorities on foreign technology companies such as Facebook and Google. The latest initiative could be seen as a planned move by Facebook to lay hands on the lucrative Chinese market, where its messaging platform WhatsApp was also banned recently. For Facebook, an operating facility that offers participation of local entities is a sure bet when it comes to convincingly re-enter the forbidden market.

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In fact, Facebook is treading a path already tested by Google (GOOG) – which set up an artificial intelligence lab in the Asian country – and Apple (AAPL) by modifying its apps to be compliant with the norms set by local regulators.

Facebook chief Mark Zuckerberg in a statement had said the global growth of American tech companies would be restricted considerably if they failed to adapt to the changing policies of regional governments and serve overseas markets. Though Zuckerberg has been eying the Chinese market for a long time, it seems the growing threat to Facebook’s business model amidst back-to-back privacy scandals has prompted him to act rather quickly on the China program.

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Facebook shares opened Tuesday’s regular trading significantly higher. The stock lost momentum as trading progressed, but ended the session up 2%.

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