Apple has invested $1bn (£693m) in Didi Chuxing, the car-hailing app that has a greater market share than US rival Uber in China.
Tim Cook, chief executive, said that the move would help Apple to better understand the Chinese market. Didi Chuxing, previously known as Didi Kuaidi, said it represented the single largest investment in its history. The firm said it provided more than 11 million rides a day and claimed to have 87% of the Chinese market share.
The company is also backed by Chinese internet giants Tencent and Alibaba.
US rival Uber has been struggling to break into the Chinese market despite having won Chinese search engine Baidu as an investor. In February Uber admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted rides.
Mr Cook said he saw many opportunities for Apple and Didi Chuxing to collaborate in the future. He also stressed the deal was a chance to learn more about China as Apple’s second-biggest market.
Apple’s ambitions in China has recently hit roadblocks with Chinese regulators shutting down the company’s online book and movie services to implement strict rules governing what can be published online. The move was widely seen as a blow to Apple, which is keen to ensure its products are popular and sell well in China, because it is the second-biggest market for its products.
Apple reported in April that its revenues fell for the first time since 2003 with China marked out as a particular weak spot.