China and Germany are expanding their cooperation into autonomous driving.

Chinese electric vehicle maker NIO signed an agreement with Bosch last July aiming at exchanging expertise.

The NIO-Bosch cooperation will expand abilities of sensor technology, autonomous driving, engine control and intelligent transportation systems. Bosch has been providing advanced components and parts to NIO, but the president of Bosch China, Chen Yudong said NIO has also helped them in the crucial area of data collection.

"We can improve our system to better fit China's road condition. That's the major thing in China," he said.

Bosch and NIO are far from being the only companies to have built a partnership under a cooperation plan between China and Germany. German equipment suppliers have also joined Baidu's autonomous driving plan, Apollo. And Beijing-based Tsinghua University has made a deal with Daimler's research center to study future developments in driving.

Though China has been working hard to develop autonomous driving, things are still in the early stages. German carmakers joining the effort means more experience and research will now be available to domestic auto companies. The National Development and Reform Commission's plan is that by 2020, intelligent cars will account for half of the country's new car production.

"In terms of the advancement in regulation, Germany has developed a bit earlier. OEM has more experience in autonomous driving testing. That just started in China a year ago and the size and scale are not really at par with German counterparts," said Zheng Yun, vice president and partner of Roland Berger Greater China.

So working with German firms will help China achieve its autonomous driving targets. Qianzhan.com, an industrial research-based information service platform, predicts that the value of China's autonomous driving market will reach more than 20 billion U.S. dollars by 2025. That means more cooperation opportunities for Chinese and German carmakers.