China has withdrawn its approval for Facebook Inc.’s plan to open a new venture in the eastern province of Zhejiang, the New York Times reports, citing a person familiar with the matter.
A Chinese government database showed that Facebook had gained approval to open a subsidiary, but the registration has since disappeared, according to checks made by Reuters.
References to the subsidiary were also partly censored in Chinese media, The NYT said.
The decision to withdraw the approval came after a disagreement between Zhejiang officials and the national internet regulator, the Cyberspace Administration of China, which was angry that it had not been consulted more closely, the newspaper said, citing its unnamed source.
The move is a setback for Facebook, which has been struggling to gain a foothold in China, the most populous country in the world, where its website and messaging app Whatsapp remain blocked.
China’s decision comes amid escalating tensions with the United States after the world’s two largest economies imposed tariffs on each other’s imports.
Tougher foreign investment restrictions targeting China, which will be part of a new law expected to pass the US Congress next month, are likely to worsen relations between the two countries and companies have been caught in the middle.
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