Facebook, the multi-billion dollar social media giant, is a company that most of the world has heard of. Many of those have their own accounts and are active on the site daily. In fact, Facebook has 1.23 billion monthly active users all across the globe. However, the situation in China has always been different. People in China know about Facebook, and have heard of Facebook, but not one person there can use it. That is because “the Chinese government controls Internet content and restricts, deletes, or bans content it deems is not in the interest of the state”, according to Investopedia. Foreign companies, like Facebook, would have to comply with the Chinese laws and regulations.
On Tuesday, China and the social media giant reaches an agreement. The agreement would allow Facebook to open Facebook Technology, a $30 million subsidiary. They would run a startup incubator making small investments and give advice to smaller, local businesses. For Facebook, this was their way of entering the Chinese market, a market that was previously unattainable.
On Wednesday, July 25, China pulled back from the agreement, no longer allowing Facebook to open the subsidiary. There was an apparent disagreement within Chinese authorities. Officials in Zhejiang, home to Alibaba’s headquarters, initially gave Facebook permission. However, internet regulators in Beijing (the Cyberspace Administration of China) never gave permission to Facebook.
Had the agreement gone through, it would have been the first time Facebook expanded into China. Beijing blocked Facebook from operating in China and Facebook has yet to be successful to enter into the tough Chinese market. In 2015, Facebook attempted to open a Beijing office. They received a permit, but the attempt was ultimately unsuccessful.
Facebook CEO Mark Zuckerberg made a statement about expanding into China in an interview with Recode last week. He stated that “we’re a long time away from doing anything. At some point, I think we that need to figure it out, but we need to figure out a solution that is in line with our principles and what we wanna dom and in line with the laws there, or else it’s not gonna happen. Right now, there isn’t an intersection.”