Global companies from Apple to Ford are deepening ties with Chinese tech firms, driven by innovation, cost efficiency, and supply-chain integration, even as U.S. restrictions push Beijing toward self-reliance.
Apple and Ford are among a growing number of global companies embedding Chinese technology into their core operations, a shift that reflects both strategic necessity and the rapid advancement of China’s tech sector. Despite U.S. efforts to curb Beijing’s technological ambitions, firms are increasingly turning to Chinese suppliers for AI, EV batteries, and other critical components, citing performance, compliance, and market access as key drivers.
A Structural Shift in Global Tech Engagement
Five years ago, China was primarily a market for global companies. Today, it is a source of innovation and capability, according to Kitty Fok, managing director at IDC China. Five years ago, China was primarily where global companies went to sell. Today, in certain sectors, it is where they go to source capability,
she told CNBC.
The shift is particularly pronounced in electric vehicle (EV) batteries, where Chinese firms like Contemporary Amperex Technology Co. Limited (CATL) have become indispensable. Ford, for example, is partnering with CATL on a $3.5 billion battery plant in Michigan, leveraging the company’s lithium-iron phosphate technology. In EV batteries, the structural shift is already complete,
Fok said. Switching suppliers is not a procurement decision you make in a quarter. It takes years of engineering, testing, and recertification.
Analysts attribute this integration to China’s scale, supply-chain depth, and speed of innovation. In 2025, Chinese EV manufacturers like BYD, Changan, and Chery captured 63% of the global EV market, while battery makers including CATL, BYD, and CALB controlled nearly 70% of the global market, according to Soumen Mandal of Counterpoint Research. Cost, scale, manufacturing depth, supply-chain integration, and the speed of innovation are powerful reasons for global companies to continue engaging with Chinese firms,
Mandal said.
U.S. Restrictions as a Catalyst for Chinese Innovation
U.S. restrictions on Chinese tech, including semiconductor exports and investments in firms like SMIC, have accelerated domestic innovation in Beijing. Lian Jye Su of Omdia noted that these policies have become a catalyst for Chinese domestic innovation and efficiency.
Chinese companies are now competing not just on price but on performance, with AI models from firms like DeepSeek and Alibaba challenging Western counterparts.
For instance, an IDC survey of European companies found that security and compliance requirements, not cost, were the top reasons for adopting 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.
Chinese AI firms have also gained traction by focusing on open-source models, making their technology more accessible to global developers. This approach contrasts with U.S. companies like OpenAI and Anthropic, which prioritize proprietary systems. The key impact of the U.S. restriction is that it has become a catalyst for Chinese domestic innovation and efficiency,
Su said.
Geopolitical Risks and Strategic Balancing Acts
Despite the benefits, global companies are navigating complex geopolitical risks. The U.S. has expanded export controls, tightened investment screening, and pressured allies to limit Chinese tech adoption. Some firms, like Apple, face scrutiny for their partnerships with Chinese companies, such as Alibaba and Baidu, which are required due to data localization laws.
Inside China, a lot of this isn't a choice,
Fok said, highlighting the regulatory environment that forces foreign companies to work with local providers. However, many firms are also hedging their bets. Western automakers are integrating Chinese autonomous driving systems while maintaining domestic suppliers for critical infrastructure. They're segmenting their Chinese tech exposure by criticality and sensitivity.
The tension is evident in the EV sector, where Ford’s reliance on CATL’s technology has raised concerns in Washington. Yet, the automaker argues that excluding Chinese suppliers would hurt its competitiveness. You can't compete in the EV transition without access to the best battery tech available,
a Ford executive said.
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