• The Oracle logo is displayed in front of the Oracle headquarters on June 19, 2014, in Redwood Shores, California.

The Oracle logo is displayed in front of the Oracle headquarters on June 19, 2014, in Redwood Shores, California. (Photo : Getty Images)

U.S. tech giant Oracle and Chinese web service provider Tencent have agreed to a cloud-computing partnership, throwing their hat an increasingly crowded field of companies scrambling to dominate a rapidly growing industry which Beijing has earmarked for rapid development in the future.

Tencent Holdings will serve as the local partner responsible for distributing Oracle's cloud-computing products and services in China, according to the memorandum of understanding signed by the two parties on Wednesday in Shanghai.

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The agreement, which buildings on a preliminary deal reached last year, is expected t o help both companies integrate Oracle's cloud-computing functions with Tencent's WeChat social network platform, which has more than 700 million active users, according to a report from Chinese tech website Caixin.com on Thursday.

Cloud-service providers such as Oracle perform complicated and data-consuming functions for customers who want to shift their computing tasks off-site.

Tencent already has existing products that use cloud computing to host online games, which is the Shenzhen-based company's biggest source of revenue. It plans to take advantage of the partnership with Oracle to expand in the Chinese market for computing products sold to financial firms, retailers, manufacturers, and other businesses.

Despite its credentials of Oracle and Tencent, the joint partnership comes late to the cloud-computing services sector, which the Chinese government has made a top development priority in an effort to shift the nation's economy up the value chain from low-end manufacturing services.

Other companies that have cloud-based operations and services in China including big names such as IBM, Amazon, and Microsoft, as well as domestic titans Alibaba Group and Huawei Technologies.

Most of the overseas companies that have invested in the China cloud computing market via joint partnerships, partly to tap local expertise and to comply with the government's stringent national security guidelines, Caixin said in its report.