China has the world's biggest internet population, with 420 million users and counting. Facebook boasts it has more than 500 million users. When will they meet?
Facebook, which is banned in China, illustrates just how difficult a landscape the country can be for foreign technology companies. The market has amazing potential but is smothered by censorship, abounds in successful domestic competitors and is technically very challenging.
Rumours of a Facebook entry to mainland China started when the social network's founder, Mark Zuckerberg, spent his "vacation" in Beijing late last year.
The establishment last month of an office in Hong Kong and a high-profile sponsorship of Social Media Week Hong Kong fuelled the speculation further, because the territory is the traditional safe route into the choppy waters of the China market.
Then came a denial that Facebook's intentions stretched beyond Hong Kong's border.
"We have no plans right now to talk about entering mainland China," Blake Chandlee, the vice president and commercial director for emerging markets at Facebook, told local media.
Mr Chandlee said there were already a large number of local social-networking sites in China and Chinese censorship also made it difficult.
Facebook is blocked by the system of internet controls known as the Great Firewall of China. The site has about 14 million Chinese-language users but they are mostly in Taiwan, Singapore and Hong Kong.
In China, the Great Firewall blocks anything the government does not want citizens to see, including the banned YouTube and Twitter. Anyone seeking to get around it has to use virtual private networks.
Facebook's role in the protests in Egypt and across the Middle East will have been closely watched by the Chinese government. Some online commentators joke that China could end up as the world's largest local area network as its system of tough controls leads it to become isolated within the global online community.
Facebook's stance brought back memories of the internet giant Google's woes in China. Last year, the search engine claimed it was the victim of a sophisticated cyberattack in 2009 that originated from China, apparently aiming to gain access to e-mail accounts of human rights activists.
Google shut down its Chinese search engine, automatically rerouting mainland users to its uncensored site in Hong Kong, but later ended the automatic redirect to avoid having its Chinese licence suspended.
Yahoo has also had a torrid time in China. In 2004 the company bowed to pressure from the Chinese government and turned over private e-mail data to the Chinese government that was later used to prosecute the activist Shi Tao, who was jailed for 10 years.
In business terms, Yahoo struggled to make headway against the local rival Baidu and finally, in 2005, Yahoo sold its China business to the domestic online group Alibaba, although it kept a 39 per cent stake in that group.
This has proven to be a very lucrative investment as Alibaba is now the world's biggest online business marketplace, learning from international rivals such as eBay how to operate but focusing on the Chinese market to expand.
But the main reason behind Facebook's caution is probably the presence of clones that have been there for years.
They include Shenzhen Tencent Computer Systems, China's largest internet company by value, which operates Tencent QQ. Then there is the Sina.com microblog page, and RenRen, which had 170 million registered users at the end of last year, largely due to its success in appealing to local tastes.
"Facebook will die in China. QQ could destroy it overnight," one commentator wrote on the TechWeb blog. "Before Facebook enters China, QQ has already got 400 million users. It's too late for Facebook."
The domestic competition already has a great head start. Ma Huateng, the chief executive of Tencent QQ, has written of how Tencent has improved and become more open.
"This is not enough yet and Tencent needs to learn a lot from Facebook about how to be open in an ordered way in the future," Mr Ma wrote.
For now, the domestic companies are very successful at working within the restrictions placed on them by the Great Firewall of China.
Perhaps this is what Facebook means when it says has no mainland China plans "right now".
