Yu Qian, CEO and founder of Chinese autonomous driving startup QCraft, said the autonomous driving sector is arriving at a "golden inflection point of growth", with policies becoming increasingly clear and open, and technologies such as 5G and algorithms more powerful.

Starting from July, QCraft and Chinese ride-sharing platform T3 began to provide robotaxi services, offering rides to passengers using self-driving cars within certain areas in Suzhou, Jiangsu province, where the companies had already been testing such services.

Autonomous driving technology is not limited to robotaxi. Many autonomous driving companies in China have been striving to advance the technology in other areas as well and accelerate its commercialization.

WeRide, headquartered in Guangzhou, capital of Guangdong province, is specialized in applying autonomous driving to intelligent transportation, freight and sanitation.

Its driverless sanitation vehicle, Robosweeper, has been tested on open roads in Guangzhou's Nansha district since May.

Shenzhen-based DeepRoute.ai aims to make autonomous driving less costly. It has cut down the cost of Level-4 autonomous driving solutions to less than $10,000 and applied it to its robotaxi fleet and medium-duty trucks, according to Zhou Guang, founder of Deep-Route.ai.

"The technology has been well-received among automakers, and we're working closely with them to integrate our system into consumer vehicles so that truly affordable Level-4 vehicles will soon be a reality," said Zhou.

The favorable policies and the companies' efforts are also seeing the increasing popularity of lower-level autonomous driving technology, also known as driving-assist functions.

Statistics from the Ministry of Industry and Information Technology show that 30 percent of new vehicles sold in the first half of this year feature Level-2 functions.

That means, around 3.61 million vehicles that hit the road from January to June have functions including lane keep and cruise control.

Auto suppliers are investing to keep up with the demand in the Chinese market for such functions.

In early August, German auto parts supplier ZF decided to invest 320 million yuan ($47.42 million) to expand a plant in Shanghai to produce electric steering systems, which the company said can support autonomous driving functions at different levels.