Google may return to China via Shanghai Free-Trade Zone: Report

The US search giant has set up a company in the Shanghai Free-Trade Zone, an economic experimental area in Shanghai which offers various incentives and liberalisation measures for companies established in the region.

Google has quietly set up Pengji Information Technology (Shanghai) Ltd inside the Pilot Free-Trade Zone in Shanghai.

With a registered capital of 5 million yuan ($778,000), the company, registered on December 25, 2014, was owned by Google Ireland Holdings, according to the Chinese media thepaper.cn.

The report also indicated that business scope of Pengji includes "IT development, computer software development, and computer systems integration". "Web page searching and email services" are among the business scope of Pengji, the use of which have been banned in China.

Chinese media believes Google is testing water for returning to the country. Quoting an unnamed source, thepaper.cn said Pengji is a "shell company" that Google plans to make use of for its way back into the country. Google keeps a low profile on the matter and is unwilling to make it known to the public before it officially announces its return to China.

The sources further added that establishing Pengji in the Shanghai Free-Trade Zone is Google's unilateral plan, rather than an investment invitation from the administrative committee of the zone -- an affiliate of the Shanghai government.

The report further added that special law provisions for the Shanghai Free-Trade Zone are also attractive to Google as overseas investors in app store businesses are allowed to raise their stake to over 50 percent, in comparison to a cap of 50 percent stipulated for those operating business outside the Free-Trade Zone.

In November, reports said Google was pursuing a return to the country by launching a Google Play store for China, which agrees to comply with the local laws on filtering content.

The new app store is reportedly not to connect to the overseas version, and the app data will also be stored in China -- a requirement in the country.

Google left the Chinese mainland in 2010 amid a censorship and hacking feud with the Chinese government. The company moved its online search services to Hong Kong afterwards, but its web searching and email services were later banned in the mainland, where people need a VPN account to access these services.