Facebook in China is win-win all the way

By Xu Qinduo Source:Global Times Published: 2016/12/14 21:23:39

Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

Facebook is reportedly planning to come back to the Chinese market. For that purpose, it's working on special software in order to meet the requirements of the Chinese regulations. The moves have drawn criticism, with critics either urging Facebook not to "kowtow" to China or predicting a bleak future for the company's return to the Middle Kingdom. But the deal can actually benefit both China and Facebook.

Facebook plays such an increasingly prominent role in gathering and spreading information that it's sometimes hard to tell if it is a news organization or technology firm. But in any sense, it is expected to follow local laws and regulations. Whether people see eye to eye with those laws is completely irrelevant, because it's about national sovereignty.

For example, the BBC was accused of defamation for how it covered the new King of Thailand. People outside the country tend to take questioning or judging the royal family for granted but Thai people hold their king high and follow the national law on royal gossip.

In China, the government pays particular attention to national sovereignty, unity and social stability, based on the country's bitter history of invasion, civil war and overpopulation. And there's national security concerns following the revelations of US global surveillance programs by Edward Snowden

With social media, freedom of speech in China sometimes has a way of running out of control. When national unity or social stability is at stake, the government takes necessary measures under the law to regulate certain posts or topics. Is that the best way to manage the Internet? It might be open to debate. But what is clear is that it's usually beyond a commercial entity like Facebook's mission to challenge this sovereignty.

It's also true of Chinese companies pursuing business interests in other countries. Fujian Grand Chip Investment Fund has been forced to drop its takeover bid for chip equipment maker Aixtron after the US blocked the deal on national security grounds. China is critical of the US move, but there's little it can do as it's within US sovereignty to make such a decision.

But for Facebook's access, the situation is different. China's economic boom is partly attributable to investment from overseas including the US. Chinese responses to the possible return of Facebook have been positive, with officials saying China welcomes Facebook as long as it follows the rules. The reasoning should be easy to grasp - that investment will create jobs and contribute to revenues. 

If Facebook returned to China, there'd be more pressure on big players such as WeChat and Weibo, which often leads to innovation and better service. 

So, yes, the Chinese economy will be a winner. But it's not the sole winner. Facebook too can win and win big. As of June this year, China had 710 million Internet users, accounting over half the total population twice the US population, with still tremendous potential to grow.

Facebook is a successful company, but its growth is set to slow down. For future expansion, the Chinese market offers probably the best chance of success. It's not only a game of numbers, but also a result of seeing the big picture that China is to become the largest economy in the coming years. Any business leaders with a long vision will probably need to think of access to the Chinese market in order not to lose a competitive edge.

Those who criticize Facebook for considering the Chinese market should be careful not to jump the gun. The Wall Street Journal reported that Facebook already started monetizing the Chinese market as early as 2015. Youzu Interactive Co., a Shanghai-based online game designer, spent about $1.6 million, almost its total advertising budget, on Facebook that year.

The result was a two-fold increase in registered daily players on its popular online game League of Angels. Imagine how, if Facebook had branches on the Chinese mainland, that will catapult its business with Chinese companies.

China has already grown a healthy social media industry of its own over the past decades while nurturing the world's largest Internet market. The country doesn't really care if Facebook invests in China or not. Whether and how to enter the Chinese market will be a decision made by Facebook and for its own benefit. But if made, it'd be more than not a win-win.

The author is a commentator on current affairs with China Radio International. opinion@globaltimes.com.cn

Posted in: VIEWPOINT

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