US Tries to Ban China, But Everyone from Apple to Ford Still Depends on Chinese Tech! Analyzing the 'Business Reality' Under Geopolitics

The United States has continuously intensified restrictions on China’s technological development in recent years. Ironically, however, Chinese technology—from artificial intelligence (AI) and electric vehicle (EV) batteries to automotive software—is increasingly embedded within the operations and supply chains of global corporations. For many multinational enterprises, China is no longer merely a market for selling products; it is gradually becoming a crucial source for acquiring technological capabilities and innovation.

For example, Apple collaborates with Alibaba and Baidu on its AI initiatives in China, Ford adopts battery technology from Contemporary Amperex Technology Co. Limited (CATL), Volkswagen partners with XPeng to jointly develop smart electric vehicles in China, and Stellantis expands its cooperation with Leapmotor, covering electric vehicle production and joint procurement.

According to CNBC, Kitty Fok, Managing Director of IDC China, pointed out that the relationship between global enterprises and China is undergoing a broad transformation. In the past, China was primarily seen as a place “where products are sold.” Now, in certain industries, it has become a place “where technological capabilities are acquired.”

China’s Shift: From Global Market to Source of Technology

Since placing Huawei on its blacklist in 2019, the US has imposed extensive controls on advanced chips and semiconductor manufacturing equipment. It has also restricted certain US capital from investing in China’s semiconductor, quantum technology, and AI sectors, adding companies such as Semiconductor Manufacturing International Corporation (SMIC) to its restricted list.

Nevertheless, China has established strong competitive advantages in an increasing number of technology industries, making it difficult for multinational corporations to completely avoid Chinese suppliers—even amid geopolitical risks.

Soumen Mandal, Chief Analyst at Counterpoint Research, noted that by 2025, BYD, Changan Automobile, and Chery Automobile together will account for nearly 63% of the global EV market. In the battery market, CATL, BYD, CALB (China Aviation Lithium Battery), and Gotion High-Tech collectively hold close to 70% of the market share.

Mandal stated that cost, scale, manufacturing capability, supply chain integration, and speed of innovation are key reasons why global firms continue to partner with Chinese companies.

He added that China’s technological rise is shifting from past reliance on low-cost manufacturing toward scale, depth of supply chains, and speed of innovation—while global firms seek balance between geopolitical risks and commercial realities.

Nowhere is this change more evident than in the EV battery industry, where CATL is deeply integrated into the global automotive ecosystem. Ford, for instance, is partnering with CATL to deploy lithium iron phosphate (LFP) battery technology at a $3.5 billion battery plant in Michigan.

Fok emphasized that once Chinese battery technology becomes deeply embedded in global supply chains, switching suppliers is not easy. The challenge goes beyond procurement—it involves years of engineering development, testing, and recertification.

Some Collaborations Are Driven by Market Access

However, not all multinational firms adopt Chinese technology because it has become irreplaceable in global supply chains. For some companies, collaborating with Chinese tech firms is primarily about staying competitive in the Chinese market.

Fok noted that multinational firms requiring AI services or cloud infrastructure to support their China operations must work with local Chinese providers due to regulatory restrictions on foreign service suppliers. Apple’s collaborations with Alibaba and Baidu are prime examples.

Lian Jye Su, Chief Analyst at Omdia, also said that market entry remains a primary driver behind many partnerships—especially as global automakers increasingly depend on Chinese suppliers for software, AI, and other systems to support vehicles sold in China.

Yet Su believes market demand isn’t the only factor. There is a “slow but continuous structural shift” occurring in supply chains and innovation flows—from batteries and EVs to energy storage and applied AI.

AI Could Be the Next Battleground

This trend is now extending into the highly competitive field of AI. As China’s AI model capabilities rapidly improve, they are challenging the prevailing notion that Western firms adopt Chinese technology mainly due to lower costs.

An earlier IDC survey of European enterprises found that security and compliance requirements, along with superior performance, are the two main reasons enterprises are adopting Chinese AI models at scale—cost being less of a priority.

Therefore, Fok argues that the market narrative of “Western firms flocking to Chinese AI solely because it’s cheaper” does not reflect reality. Business decisions are primarily driven by performance and constrained by compliance requirements.

Moreover, unlike US-based Anthropic and OpenAI, Chinese firms such as Alibaba and DeepSeek emphasize open-source models, making it easier for global developers to access and utilize related technologies.

Notably, China’s “great leap forward” in AI capabilities occurred precisely during the period when the US restricted China’s access to advanced semiconductors.

Su pointed out that while US tech restrictions have limited China’s development in certain cutting-edge semiconductor areas, they have also acted as a catalyst for domestic innovation and efficiency improvements. As a result, Chinese firms maintain competitiveness in fields such as AI, batteries, and automotive software.

Chinese Technology Won’t Fully Replace Others, but the Global Tech Landscape Is Fragmenting

That said, China’s technological expansion does not mean multinational firms will fully embrace Chinese tech. Geopolitics will still determine which industries can cooperate and which face higher barriers.

Su expects resistance to Chinese technology to remain strongest in areas such as advanced semiconductors, cybersecurity-related services, defense, and national security.

Thus, the future global tech industry may neither be fully “locked out” nor fully “embracing” China, but instead form varying degrees of cooperation based on technological dependency, commercial needs, and national security considerations.

Mandal of Counterpoint believes that Chinese technology will see increased global adoption in EVs, batteries, consumer electronics, robotics, drones, and certain AI and semiconductor fields, ultimately forming a more fragmented yet pragmatic global tech ecosystem.

Fok notes that this structural shift is already quite evident in battery and electronics manufacturing; AI is currently in transition, while automotive software remains in early development.

This implies that the next phase of US-China tech competition may not simply be about “who can restrict whom,” but rather, to what extent global firms can decouple from Chinese technology after it has become deeply embedded in their supply chains.