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Google’s Return Likely Possible Through Shanghai FTA-registered Pengji

| Dec 10, 2015 06:58 AM EST

Google's return to China may be possible through a Shanghai-registered shell company.

A shell company that Google Inc. registered in Shanghai last year could become the key for the search engine company’s possible return in China, China Daily reported.

The report said that Pengji is registered in a high-rise office building in the China (Shanghai) Pilot Free Trade Zone, a testing ground for economic reforms of the central government.

According to the website of the Shanghai Administration for Industry and Commerce, Google Ireland Holdings, a European subsidiary of the multinational, is listed as its sole shareholder.

The website said that the company has 5 million yuan ($780,000) in registered capital, and names William A. Farris as head of the firm. Farris also works as an attorney for Google's Beijing office, and also a member of the State Bar of California.

Google, which withdrew its operations from the Chinese mainland in 2010, did not confirm or deny earlier reports of a possible reopening.

However, companies that have worked with Google earlier said that the company may announce its return in the first half of 2016.

The report said that the rare investment made by Google in a Beijing-based artificial intelligence startup, Mobvoi, which is developing smart wearable technologies, is the latest indication that Google is set to return to the Chinese mainland.

Although it did disclose the amount it invested in Mobvoi, the companies said that the firm has now raised $75 million in equity financing.

Analysts, however, noted that Google may have already missed out on the best opportunities to expand in China, which is now considered the biggest Internet market.

Dong Xu, a researcher at industry consultancy Analysys International, said that the company has now a very small chance to overtake Baidu Inc. in the online search sector, which took over Google's market share after the firm's departure.

According to the report, Google hopes to get into China's smartphone market, where its Android operating system has more than half of market share. Observers are expecting the company to open an application store custom-made for Chinese mainland users.

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