The city of Hangzhou has proposed an online version of Shanghai's free trade zone that facilitates cross-border e-commerce, the Shanghai-based Oriental Morning Post reported on Monday.

The host city of Alibaba Group Holding Ltd, one of the world's biggest e-commerce companies, said it is in negotiations with relevant ministries to create an online zone that is complementary in function to the landmark Shanghai FTZ.

Hangzhou's deputy mayor, Xie Shuangcheng, told the paper that the zone will focus on institutional innovation in customs clearance of cross-border e-commerce deals.