China is rapidly narrowing the technological gap with Western countries, according to Microsoft's vice chair and president Brad Smith, CNBC reported on Wednesday.

China is "in many ways" close to or catching up with the U.S. and Europe on technological developments, said Smith at the Web Summit tech conference in Lisbon, Portugal, on Tuesday.

"I think one of the dangers, frankly, is that people who don't go to China too often assume that they're behind," he told CNBC. "But when you go there, you're impressed by how much they're doing."

He said that Chinese and American companies will continue to compete in technology "in the distant future," and called on U.S. and European companies to work together in order to boost economies and introduce innovations like artificial intelligence to the global stage.