Tencent, Alibaba in race to snap up smart city deals with local gov't

BEIJING - After vying against each other in mobile payment, online retail, and taxi-hailing, Chinese internet giants Tencent and Alibaba have taken their battle to a new field - government smart city initiatives.

Several announcements from both Tencent and Alibaba over the past month suggest the two firms are deepening their involvement in local government's initiatives to improve administrative efficiency and transparency.

Under these partnerships, Tencent and Alibaba have asked local governments to move part of their public services, such as applying for car license plates , social security and hospital registration, to the companies' respective mobile applications..

Starting in April, citizens in a number of eastern Chinese cities and northern Chinese province Shanxi can now use Alibaba's mobile payment service Alipay and microblog Sina Weibo to make hospital appointments, check traffic tickets, pay for utility bills and other services.

Cities and provinces are also signing up to Tencent to have public services loaded on popular instant messaging app WeChat. Users in Shanghai, Zhengzhou, capital of Henan province and southwest municipality Chongqing will be the first to access such services on their WeChat.

The cooperation between local governments and tech firms came after Chinese Premier Li Keqiang urged companies in traditional sectors to leverage internet and cloud computing to grow their competitiveness as the world's second largest economy faces structural headwinds.

Growth of China's economy moderated to a six year low of 7 percent between January and March this year.

"These partnerships with internet firms show that local governments are responding to the central leadership's call to give the internet a greater role in regional economic growth," said Tina Zhang, research director at IT consultancy Gartner.

Citizens in China's largest cities have been complaining about bureaucratic inertia and inefficient public services. Internet could offer a solution to these problems but success depends on the scope of services available through mobile apps and whether they can really make a difference in service quality, Zhang said.

"Moving these services online will eliminate a lot of 'sore points' for citizens, such as waiting in long lines at administrative halls and dealing with grumpy public servants" says Liu Xiaojie, an Alipay executive. "What used to take people hours and miles can now be finished in seconds on our apps."