Chinese Internet giant Alibaba Group Holding Ltd. has unveiled plans to establish a regional headquarters in Xi’an city to support the growth of western China and the country’s One Belt One Road initiative.
Alibaba’s partnership with Xi’an city government is multi-faceted, with the Internet firm’s affiliates and subsidiaries participating to help drive growth of the city and the region in terms of smart logistics, financial services, cloud computing and more.
“To support the One Belt One Road initiative, Alibaba will establish a northwestern headquarter in Xi’an. Also, Cainiao Network will expand its businesses to the city to aid the region’s development and upgrade its services industry,” said Jack Ma, founder and executive chairman of Alibaba, during a signing ceremony held on August 19.
Ant Financial, the financial services affiliate of Alibaba, also signed a strategic partnership agreement with the Xi’an city government to push the development of mobile smart city capabilities, as well as support upgrades in public services there. The duo will partner in the fields of transportation, commerce, public affairs and personal credit. In addition, Alibaba Cloud, a cloud computing subsidiary of Alibaba, will partner with Xi’an Jiaotong University to establish a big data institute.
China’s western region has historically lagged behind eastern and coastal provinces in economic development. In 2016, the four Chinese provinces with the largest GDPs were Guangdong, Jiangsu, Shandong and Zhejiang, all located in the east. The economy of Shaanxi province, which counts Xi’an city as its capital, is only 24% as large as Guangdong province’s economic output.
In order to reduce the imbalance, Beijing initiated a national policy in 2000 to accelerate economic growth in western China. The policy has achieved some results. In 2016, Guizhou province, once among the poorest regions in China, recorded GDP growth of 10.5%, compared with coastal Guangdong’s 7.5%.
Alibaba’s move follows that of its rival JD.com Inc, which in May announced plans to invest RMB20.5 billion (US$3.07 billion) in Xi’an to establish its global logistics headquarter, JD autonomous driving industry center and JD Cloud operations center.