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Charlie Dai, head analyst at Forrester Research Inc, said Microsoft is injecting AI into all of its businesses, including its Azure cloud services, which are gaining stream in China. But the company also faces mounting competition from local players such as Alibaba Group Holding Ltd and Huawei Technologies Co Ltd.

Carmakers in China recalled more than 20 million defective cars in 2017, a record high since the country introduced legislation on car recalls in 2004, according to an official with China's top quality watchdog.

Cao Chen and Zhu Lixin contributed to this story.

Cars imported from the United States might soon lose their appeal, as China has decided to impose an additional 25 percent tariff on a list of 106 items, which includes automobiles, in a retaliatory response to the Trump administration's tariff proposals.

Chemical etching is a process that removes metal in order to produce metal parts in desired shape and thickness.