Chinese authorities appear to have withdrawn approval from Facebook's planned "innovation hub" in its eastern province of Zhejiang, according to the New York Times.
The social media platform announced on Tuesday it had registered a subsidiary in Hangzhou as part of a plan to invest in local start-ups.
But the approval, listed on a Chinese government database, later disappeared, and references to it were partially removed from the country's tightly controlled media, the Times reported.
An employee who answered the phone at the Market Regulation Bureau in Zhejiang's provincial capital Hangzhou on Wednesday said they were unable to check the status of the Facebook subsidiary, which had been briefly listed on China's National Enterprise Credit Information Publicity System, the paper said.
"I can't find it from here, because we don't have the system to do that," the employee said. "We're not a companies search facility."
Facebook had registered Facebook Technology (Hangzhou) Co. Ltd. on July 18, with start-up capital of U.S.$30 million and a manager named as Zhang Jingmei. The company was wholly owned by Facebook's Hong Kong subsidiary.
Commentators said Facebook had likely overestimated the ruling Chinese Communist Party's willingness to cooperate.
"They don't want real openness on the Chinese internet," Veteran journalist Zhu Xinxin said. "They don't want companies like Facebook bringing more freedom with them."
Retired Shandong University lecturer and rights activist Sun Wenguang agreed, saying that not everyone in China knows how to scale the Great Firewall of internet censorship coordinated by the government's powerful Cyberspace Administration.
"We would greatly welcome Facebook being available [here], because a lot of people here have no channels of information through which to gain a real understanding of China," he said. "All they can get is a limited number of websites and newspapers approved by the Communist Party."
"According to my understanding, 99 people in 100 have no idea how to scale the Great Firewall."
Beijing-based political commentator Zha Jianguo said Facebook's planned venture is likely a casualty of the looming trade war with the United States.
"One thing we can be sure of, and that is that the Chinese government will be seeking to curb online freedoms and preserve the difference between China's internet and the rest of the world's," Zha said.
"Particularly when it comes to politics and news."
Zhu agreed. "There are bound to be limits to what they will let Facebook do in China, especially when we are looking at a trade war," he said. "There's no way the Chinese Communist Party will loosen up its tight hold on power."
According to Guangdong-based activist Jia Pin, Facebook will remain a valuable platform for those internet users who do know how to circumvent the complex system of blocks, filters, and human censorship that make up the Great Firewall.
"I will still carry on using Facebook, because I need it to put out information on human rights issues," Jia said.
"A lot of social media platforms here in China have no privacy to speak of. Chinese internet service providers will cooperate and give information [about users] to government departments, especially the police, for certain."
Internet user Hu Qiang said there is little hope of Facebook making an entry into the Chinese market without giving up some important features.
"Facebook would definitely have to lose some features, so it would become Facebook with Chinese characteristics, and its users would be limited in what they could say on it pretty much as they are on other social media platforms," Hu said.
"They would still run the risk of censorship and having their account shut down, and Facebook user data would very likely be shared with the government," he said.
Facebook has previously admitted to having data-sharing partnerships with at least four Chinese companies, including smartphone-maker Huawei, which has already been the subject of security concerns in the United States.
Facebook has said it had allowed Huawei, Lenovo, and smartphone manufacturers OPPO and TCL to access some user data.
The companies may have been able to access data about users' friends on Facebook, under the agreement, regardless of what the users' privacy settings were, the Times reported last month.
Facebook's Hong Kong subsidiary has been registered for nearly eight years, but the company's capital was increased in May.
Reported by Lau Siu-fung for RFA's Cantonese Service, and by Qiao Long for the Mandarin Service. Translated and edited by Luisetta Mudie.