Washington is stepping up efforts to limit China’s technological ambitions, but Chinese technology is becoming increasingly difficult for some of the world’s biggest companies to avoid. Apple has partnered with Alibaba and Baidu on AI services in China, while Ford is working with CATL on battery technology. Volkswagen has teamed up with Xpeng to develop smart electric vehicles, and Stellantis is expanding its partnership with Leapmotor.
Analysts say the shift reflects a broader change in China’s role in global technology. The country is increasingly becoming not only a market for international companies, but also a source of technology, manufacturing expertise and innovation.
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“Five years ago, China was primarily where global companies went to sell. Today, in certain sectors, it is where they go to source capability,” Kitty Fok, managing director at IDC China, told CNBC.
From Manufacturing Hub To Technology Partner
China has built strong positions across several technology industries, particularly electric vehicles and batteries. Automakers including BYD, Changan and Chery accounted for nearly 63% of the global EV market in 2025, while CATL, BYD, CALB and Gotion controlled close to 70% of the global battery market, according to Counterpoint Research.
Cost and scale remain important, but China’s manufacturing depth, supply-chain integration and speed of innovation are also encouraging global companies to work with Chinese firms.
“China’s technological rise is shifting from low-cost manufacturing to scale, supply-chain depth, and speed of innovation,” said Soumen Mandal, principal analyst at Counterpoint Research.
The shift is particularly visible in EV batteries. Ford is working with CATL to use its lithium-iron phosphate technology at a $3.5 billion battery plant in Michigan. Fok said such partnerships can be difficult to unwind because changing suppliers requires years of engineering, testing and recertification.
China’s Role In Global AI
Artificial intelligence could become the next major area of Chinese technological influence. For companies operating in China, working with local AI and cloud providers is often necessary because of restrictions on foreign services, contributing to partnerships such as Apple’s with Alibaba and Baidu.
Chinese AI models are also increasingly competing on performance rather than price alone. An IDC survey of European companies found that security, compliance and performance were the leading factors behind extensive adoption of Chinese AI models.
“So the popular narrative that Western companies are rushing to Chinese AI because it’s cheap gets this backwards,” Fok said. “The decision is performance-led and compliance-gated.”
Companies including Alibaba and DeepSeek have also focused on open-source models, making their technology more accessible to developers worldwide. Lian Jye Su, chief analyst at Omdia, said U.S. restrictions on advanced technology have also encouraged Chinese companies to strengthen domestic innovation and efficiency.
Geopolitical Limits Remain
The growing use of Chinese technology does not mean geopolitical concerns have disappeared. Analysts expect resistance to remain strongest in sensitive areas such as advanced semiconductors, cybersecurity, defense and national security.
Adoption is therefore likely to vary by industry. Counterpoint’s Mandal expects Chinese technology to expand globally across EVs, batteries, consumer electronics, robotics, drones and selected AI and semiconductor applications, creating what he described as “a more fragmented but pragmatic global technology ecosystem.”
Fok said the shift is already structural in batteries and electronics manufacturing, while AI remains in transition and automotive software is still at an earlier stage.
