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GitHub Considering a Subsidiary in China

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GitHub might be going international. The Financial Times reported yesterday that the company's chief operating officer, Erica Brescia, said GitHub's considering the formation of a subsidiary in China due to fear of U.S. government restrictions.

Chinese developers are reportedly worried that U.S. export restrictions could eventually leave them without access to GitHub. That's less than ideal for a platform specifically designed to offer people easy, continuous access to technical projects.

It's also not without precedent: GitHub restricted the accounts of people in Iran, Syria and Crimea earlier this year due to U.S. trade laws. Opening a subsidiary in China would assure GitHub users within the country that they won't lose access to important code repositories any time soon. (At least not because of U.S. restrictions; the Chinese government might have its own qualms.)

Brescia said that GitHub planned to open a "wholly foreign-owned subsidiary in China for the purposes of hiring staff, starting with a general manager" before exploring "joint ventures and the possibility of hosting GitHub content in China."

GitHub's reportedly been warmly received by the Chinese government after meeting with the Chinese Ministry of Industry and Information Technology, as well as the Ministry of Public Security. Both are keen to preserve access to GitHub repositories.

That's likely part of a larger push from the Chinese government to phase out foreign hardware and software in favor of domestic alternatives. Those alternatives would likely be built atop open-source projects, many of which are hosted on GitHub.

GitHub likely doesn't want to lose access to the Chinese market. While many of its features are available for free, the company also offers paid service plans that scale from individual developers to enterprise customers with many employees.

Losing access to China might have a significant impact on GitHub's revenues. Microsoft spent $7.5 billion to acquire the company in June 2018; its shareholders probably don't want to risk any problems just because of the U.S.-China trade war.