Government in Lhasa, capital of Tibet autonomous region, on Tuesday signed a deal with Alibaba Cloud to promote the city's digital construction.

Cloud computing, artificial intelligence, and the construction of digital cities are driving markets across the world, and with joint efforts in these industries, Alibaba Cloud and Lhasa government plan to build a "digital Lhasa", the globe's highest located smart city, said Zhao Minmin, director of Tibet affairs, Alibaba Cloud.

"The digital technology provided by Alibaba Cloud will be put into use in the city's government administration, traffic, and tourism predictions," said Zhao Minmin.

The projects will also cover medicine, education, city management, and agriculture and animal husbandry, Zhao said.

Data from Alibaba Group shows that Tibet has made significant efforts embracing the internet and digitization in recent years.

In the first half of 2019 alone, the region's number of Taobao online stores surpassed 7,000, with online sales exceeding 600 million yuan ($87 million).

Among the hundreds of products, caterpillar fungus and yak jerks are the most popular items, based on Alibaba stats.

According to Alibaba Cloud, it first introduced its Smart City program in Hangzhou, where it helped digitize the city's traffic system.

The company then continued to conduct smart city projects in Suzhou and Macao. In 2018 it launched a refined smart city model in Shanghai and Haikou, Hainan province.