Google quietly opens third China office

Google has quietly opened a third office in China, highlighting its growing hardware and ad businesses in the country even as the US tech company’s signature search engine remains blocked there.

The new office is in Shenzhen, the former fishing village turned Asian Silicon Valley that borders Hong Kong and is home to Chinese tech giants including Tencent and Huawei.

Key services of several US companies are blocked in China but the groups continue to generate big business from the country. China is one of Facebook’s top four international money-spinning regions along with western Europe, Canada and Australia.

Increasingly global-facing Chinese manufacturers, including handset makers Huawei and Xiaomi, and service providers such as hotels and tourism groups are turning to the likes of Google and Facebook to advertise their wares overseas.

Google’s search engine has been blocked in China since 2010, when the company pulled out after several years of conflict with Beijing over censorship of searches involving politically sensitive keywords. But Google maintained a presence in the country and recently has been making modest efforts to mend relations.

Google’s latest office, first reported by TechCrunch, will supplement offices in Beijing and Shanghai that together employ some 600 people, mainly engineers and sales staff. In an email sent to “China Googlers”, the tech company’s China head said a number of domestic staff were regularly shuttling to Shenzhen on business.

“We’ve heard a lot of feedback that there was a need for a space to work from while in the area — so, after a few months of scouting, we recently signed a lease for a serviced office in Shenzhen,” he wrote.

The Shenzhen office ultimately could match Beijing and Shanghai in size with around 300 workers. Google also recently opened its first artificial intelligence lab in China.

“We have many important clients and partners in Shenzhen. We’re setting up this e-suite office to be able to communicate and work with them better,” Google said.

In addition to sales staff, Google employs engineers in China working on global products — part of its efforts to tap top talent across the globe — and is moving deeper into hardware, for which Shenzhen is a hub.

That push was deepened by Google’s $1.1bn deal in September to acquire the smartphone manufacturing operations of HTC along with some 2,000 staff, a move described by the Taiwanese smartphone maker’s co-founder as allowing Google to “supercharge” its hardware business.

Google broke into smartphone manufacturing in 2011 with its $12.5bn purchase of Motorola Mobility. It went on to run Motorola’s handset division as a standalone operating unit before selling the business to Lenovo in 2015 for $3bn.

Clement Yip, a partner at PwC in greater China, said the ad sales businesses of overseas internet groups have been growing “quite significantly” over the past several years.

While China’s homegrown tech titans such as Tencent and Alibaba have mass coverage domestically and can serve the local market, they have far smaller exposure overseas, where they primarily target Chinese tourists.

“So when you are thinking about going outside China, you have no choice but to work with [the overseas internet companies],” said Mr Yip.