(Yicai Global) Dec. 27 -- Internet goliath Alibaba Group Holding Ltd. [NYSE:BABA] is embarking on a course of transforming and upgrading traditional local state-owned enterprises by forming a partnership with the government of Shandong province, a big manufacturing province in east-central China, as China News Service reported.
Gong Zheng, governor of Shandong province, and Alibaba Chairman Jack Ma witnessed the signing of the cooperation agreement yesterday. That same day, Weichai Power Co. [HK:2338; SHE:000338], Shandong Iron and Steel Group Co. and Yankuang Group Co. penned cooperation agreements with Alibaba's cloud service subsidiary Alibaba Cloud Computing Co.
These large local SOEs in Shandong province will work with Alibaba to apply artificial intelligence, Internet of Things and cloud computing to optimize production, reduce energy consumption and spur technological innovation. Alibaba Group's fintech arm Ant Financial will also work with the Shandong government to help it build online platforms for non-tax payment and other electronic services to boost efficiency and convenience.
Alibaba Cloud Computing Co. and Ant Financial will also help Jinan, Qingdao and other major provincial cities to introduce mobile payment systems in public transport system. The subway under construction in Jinan and the one already running in Qingdao will allow passengers to buy tickets using Alipay and bus passengers can scan an Alipay QR code. Many key traditional Chinese manufacturing enterprises are still state-owned, and thus working with economically-developed Shandong province has achieved a multiplier effect for Alibaba in this field.