China Unicom, Baidu form alliance amid SOE ownership

China United Network Communications, the government-owned parent of the country's second-largest wireless carrier, and Baidu Inc agreed to partner on mobile internet, artificial intelligence and other areas amid plans for ownership reform of state-owned enterprises.

The companies will also cooperate on big data and basic telecommunication services, the parent of China Unicom Hong Kong Ltd said Wednesday in a statement. Baidu will help add digital advertising and tools like facial recognition at the mobile carrier's more than 300,000 stores, the search engine giant said in a separate statement.

The announcement comes about a month after the National Development and Reform Commission selected China United Network, along with five other state-owned enterprises, for a pilot program in mixed-ownership reform with the aim of revitalizing them. The collaboration raises the prospect of China United Network further engaging with Baidu on reform, though any move will need government approval, said Steven Liu, an analyst at China Securities International.