According to Apple chief executive Tim Cook, the move will help the firm 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 says it provides more than 11 million rides a day, giving it 87% of the Chinese market share.

US rival Uber has been struggling to break into the Chinese market, and only in February admitted it was losing more than $1bn a year in China.

Strategic alliance

Mr Cook said he saw many opportunities for Apple and Didi Chuxing to work together in the future and pointed to the deal as a chance to learn more about the Chinese 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.

In April, Apple for the first time since 2003 saw its revenues fall and China was marked out as a particular weak spot.

(BBC)