US manufacturer General Electric has partnered with Huawei Technologies in order to develop smart machines that will help boost productivity and efficiency, as part of a drive to promote its “industrial internet” business in China.

The partnership sees GE establish an $11m (£8.3m) digital space in Shanghai that will act as a start-up incubator focused on developing new software applications for intelligent machines.

GE has ambitions plans to become a leader in the so-called productivity revolution that will come from combining intelligent analytics capabilities with traditional industrial machinery.

The company has sold off a number of financial assets to power its restructure in this area, and has reportedly made $500m in savings this year alone by introducing connected machinery to its jet engine and diesel locomotive manufacturing units. This saving is expected to reach $1bn a year by 2020.

“Once we got it right for ourselves we take it to our customers,” said Bill Ruh, chief digital officer at GE. “Were bringing this to China, were open for business in China today to be able to do this.”

GE will reportedly invest $500m annually in software as part of its digital drive, and is expecting to bring in around $6bn in revenue from enterprise software products this year, which is expected to increase to over $15bn by 2020.

The partnership with Huawei will see the Chinese firm adopt GEs Predix operating system for its connected products, which is already used by China Eastern Airlines Corp, China Telecom and on Tianjin citys street lamps grid.

In return, GE will leverage Huaweis product portfolio and co-create end-to-end applications for consumers using its enterprise grade technology.