(Yicai Global) Aug. 24 -- Google's self-driving affiliate Waymo has set up a subsidiary in Shanghai to design and test autonomous vehicle parts and products as the American search giant pursues a return to China.

Waymo is the sole investor in Huimo Business Consulting, which registered in the Shanghai Free Trade Zone in May, Chinese news site Guancha reported after discovering the firm on the National Enterprise Credit Information Publicity System. Waymo may also bring its first self-driving taxi service to China by the end of the year, the report added.

Chen Mingbo, head of the Shanghai Municipal Commission of Economy and Informatization, led a delegation of local leaders to some of Silicon Valley's top firms last month, including Google, Tesla and Intel. While there to push the World Artificial Intelligence Conference next month, the officials also encouraged the American firms to ramp up business development and investment in Shanghai.

All the signs have been pointing to Google's return to China as of late, it launched its first WeChat mini app last month, released a China-compatible version of its translation app last year and got its file management app Files Go into the market this May. According to a Bloomberg report citing co-founder Sergey Brin, the firm is willing to relax its anti-censorship stance and is preparing to bring its search services back to the mainland.

Google decided nearly a decade ago to withdraw its core products from the local market by not conforming to Chinese censorship regulations. But during its hiatus, the Chinese internet sector has flourished as the likes of Tencent, Baidu and Alibaba rise to global acclaim. There are more than 800 million people online in the world's most populous country, but that still leaves around 600 million yet to make their way onto the web, leaving a vast space for development.

Editor: James Boynton