China Telecom recently won a bid to provide IT services to a government information center in Liaoyang, a third-tier city in Liaoning Province, for as little as RMB 0.01. This has sparked controversy for alleged price distortion and unfair competition, local media is reporting (in Chinese).

The Liaoyang city government has set aside RMB 8.93 million for the procurement of hardware needed in the cloud computing and big data processing platforms of its information center, among others, according to an online procurement announcement published by the Liaoyang government. In addition, the bid winner is requested to provide routine maintenance for the platforms for a period of 10 years.

China Telecom’s bid underscores the rising competition in the country’s cloud computing sector, no stranger to such practice. Last month, Chinese internet giant Tencent reportedly won a government cloud service contract with an RMB 0.01 bid, in its attempt to expand its foothold in the country’s huge cloud market as well as wrest market share from Alibaba’s cloud computing unit Aliyun, estimated by Morgan Stanley Research to have grabbed half of the country’s US$ 2 billion public cloud market (in Chinese).

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Sheila Yu

Sheila Yu is a Shanghai-based technology writer. She brings readers the biggest news from Chinese language tech media. Reach her at sheila@technode.com.