Alibaba is the force behind hit Chinese Communist Party app - sources

By Pei Li and Cate Cadell

BEIJING (Reuters) - A Chinese government propaganda app that recently became a huge hit was developed by Alibaba, two people at the company told Reuters, at a time when the nation's tech firms are under global scrutiny over their ties to Beijing.

"Xuexi Qiangguo", which literally translates as 'Study to make China strong' and is a play on the government propaganda theme of applying President Xi Jinping's thoughts, overtook Tik Tok's Chinese version Douyin and WeChat to become the county's most popular app on Apple's China app store last week.

It was developed by a largely unknown special projects team at Alibaba known as the "Y Projects Business Unit", which takes on development projects outside the company, said the people.

New York-listed Alibaba declined to comment on whether the business unit had developed the app.

The app's development by Alibaba, whose Chairman Jack Ma is a member of the Communist Party, is the latest example of a Chinese tech company collaborating with the government.

The country's propaganda department has released the app ahead of next month's National People's Congress in Beijing, China's top annual parliamentary gathering.

JOB OPPORTUNITIES

The app, which includes short videos, government news stories and quizzes, was created by an Alibaba team. A user of Alibaba's own messaging app DingTalk can use their login credentials to log into Xuexi Qiangguo. Alibaba said the app was built using DingTalk's software.

Staff at the Alibaba unit are responsible for developing and maintaining the app that includes news, videos, livestream and community comments, according to the sources and a job advertised for Xuexi Qiangguo on Alibaba's career website.

The unit does not have a website, but is described in job ads on popular Chinese careers site Zhipin.com as a strategic level project that is in a creation stage and offers many job opportunities.

At least part of the app's runaway popularity can be attributed to directives issued by local governments and universities that require people in China's expansive party member network to download the app.

The app has been downloaded over 43.7 million times on Apple and Android devices since its launch in January, according to estimates by Beijing-based statistical consulting firm Qimai.

It was not immediately clear whether Alibaba makes money from the app, or who initiated its development.

Last month, Alibaba executive vice-chairman Joe Tsai slammed U.S. treatment of fellow Chinese tech firm Huawei Technologies as "extremely unfair", and sharply criticised what he called an attempt by the U.S. government to curb China's rise via the trade war.

Huawei, the world's biggest network equipment maker, has been largely barred from the United States and some other countries on suspicion that its products could be used as a conduit for spying. Huawei and China have denied the allegations.

EXTENSIVE COLLABORATION

But major Chinese tech companies have cooperated extensively with governments in China on infrastructure, cloud computing and public security as part of the country's "Internet Plus" policy drive to improve traditional industries.

Collaboration with state media has also increased in recent years, amid tighter censorship laws that require companies to toe the party line.

Tik Tok creator Beijing ByteDance Technology Co and WeChat creator Tencent Holdings Ltd are among some who have collaborated with state media outlets using their social media platforms.

"The upside for these firms is that their track record of cooperation can put them in a better position to obtain key licenses or opportunities," said Mark Natkin, managing director at Beijing-based Marbridge Consulting, adding these collaborations were Beijing's way of maintaining control over private firms.

"The downside is they may get tapped to participate in projects which, on economic or PR considerations alone they might normally eschew, but which may be uncomfortable or unwise to refuse."

(Reporting by Pei Li and Cate Cadell, Additional reporting by Shanghai newsroom; Editing by Muralikumar Anantharaman)