Can Facebook and China be friends?

China, the world's biggest Internet market, is a huge draw for Facebook as it prepares to go public, but Beijing is deeply suspicious of social networks that lie beyond the control of the ruling Communist Party.

Of all the factors that will decide Facebook’s potential market value as it prepares to sell shares to the public, few weigh as heavily as China.

On the one hand, the world’s biggest Internet market, with more than half a billion citizens online, could be a gold mine. On the other, the social media giant could reach those users only by bowing to strict Chinese censorship, risking a costly blow to its international reputation.

Facebook is clearly tempted. Its filing to the SEC this week mentioned China nine times. “China is a large potential market for Facebook” and “we continue to evaluate entering China,” the document said.

But the company is also dubious about its prospects for success there. “We do not know if we will be able to find an approach to manage content and information that will be acceptable to us and to the Chinese government,” it acknowledges.

Strong dragon must beware local snakes

Nor would China be a pushover even if Facebook did decide to compete here, warns Kuang Wenbo, a professor of Internet studies at Beijing’s Renmin University. A number of local Facebook clones have already firmly established themselves, he points out, quoting a Chinese proverb: “A strong dragon cannot beat a local snake.”

Facebook has been blocked in China for nearly three years, making it inaccessible to the vast majority of local Internet users who do not use sophisticated software to circumvent the “Great Firewall” that online censors have erected.

The government here is deeply suspicious of outfits such as Facebook that offer platforms to build social networks beyond the control of the ruling Communist Party.

Policymakers will likely be even more nervous when they read Mark Zuckerberg’s letter to potential investors, in which the Facebook founder this week set out his vision of “a more honest and transparent dialogue around government that could lead to more direct empowerment of people.”

Path to compromise?

But Facebook has never taken up the cudgels on behalf of human rights and freedom of expression in the public way that Google and Twitter have done, and “by saying they are thinking about China despite the complications, they show they are keen and would try to find a compromise,” says Jon Russell, Asia editor of The Next Web, a leading online publication focusing on Internet technology.

“They’d have to follow local rules” that require websites to censor members’ comments and photos to avoid politically and socially sensitive topics, warns Isaac Mao, an expert on the Chinese Internet. “But if they find a good local partner, perhaps they could find a new way to deal with this problem.”

Mr. Mao hopes that Facebook will try “to tinker with the rules, to see if they can introduce something new,” to act as a counterweight to Chinese social media that he says seem only too willing to do the government’s bidding. How that might be achieved, however, he is not sure.

Hard questions

Meanwhile, “it is still doubtful whether Facebook can be as successful in China as it is in other parts of the world,” suggests Professor Kuang, who points out that Google could never rival local copycat search engine Baidu before it withdrew from China, complaining that local Gmail accounts belonging to dissidents had been hacked.

“If they don’t move soon it will be very difficult for Facebook to get into the Chinese market,” adds Mao. “It will be very hard and very expensive for them to take over the user base” that local competitors such as RenTen and QQ have already established in a mature market.

In an interview last November with Charlie Rose’s PBS TV program, Mr. Zuckerberg said going into China would raise “hard questions.

“But since, for right now, we’re not available, and we don’t have an immediate path to become available, these are not policy decisions we have to make,” he added. “At some point I think there would be some discussion around what it would take to go there, and then we’d at that point have to figure out whether we were willing to do that.”