(Yicai Global) July 8 -- Alibaba Group Holding plans to develop Zibo in China’s coastal province of Shandong into the first ever Hema city, with digital farming infrastructure in place to enable produce to quickly reach markets nationwide, according to tech news site Lieyunwang.

Zibo’s partnership with the e-commerce giant has been upgraded to turn the city into a model of digital agriculture named after Alibaba’s fresh food retail brand Hema Fresh, Jiang Duntao, secretary of the municipal party committee, said at a press conference today.

Under their agreement, Zibo will have a center for the digital farming sector that covers about 0.5 square kilometers and will include a processing hub.

Zibo has the advantage of having a solid farming culture, high-quality produce, and a full digital network, Jiang said, adding that the city already has experience of local Hema villages growing produce to order for Hema Fresh.

The Yellow River flows through Zibo, which is located in the center of Shandong, and the city also abuts Shouguang, China’s so-called home of vegetables, which has the country’s largest wholesale veg market.

The value of Zibo’s agriculture, forestry, animal husbandry and fisheries rose 2.2 percent last year to CNY27.5 billion (USD3.9 billion).

Alibaba will build five agricultural cooperative transport and processing hubs nationwide, the Hangzhou-based firm said on June 30. Centers in Guangxi and Yunnan provinces have already gone into operation, while the others in Sichuan, Shaanxi and Shandong will be finished this year. The distribution network based on these will be able to deliver 1 million tons of fresh produce across the country each year.

Alibaba also penned a deal with the Ministry of Agriculture and Rural Affairs at the end of last month. They will work together on e-commerce platforms, inclusive finance and digital rural governance to help the implementation of China's rural revitalization strategy.