Taxi-hailing app Uber is reportedly burning through over $1 billion per year in China as the competition intensifies with another China-based taxi app Didi Kuaidi.

Uber's Chinese venture strengthened its valuation on January to over $8 billion after raising over $1 billion from its newest round of funding. However, the firm is not profitable in China yet as competition heats up. In an interview with Canadian tech news site Betakit, Uber CEO Travis Kalanick revealed that "we're profitable in the USA, but we're losing over $1 billion a year in China." 

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Kalanick's comments were confirmed by a spokesperson from the company to CNN, explaining that strong profits in other nations are fueling its international expansion. The spokeswoman said that the company though is equipped with financial strength to win over China in the long run, while its biggest rival "spends many multiples of what we do to buy up unprofitable market share."

The spokeswoman further said that Uber is currently operating in over 40 Chinese cities and plans to expand to 100 by the end of 2016. 

Meanwhile, Didi Kuaidi, which is supported by Internet giants Alibaba and Tencent, pushed back. Its spokeswoman Casper Sun revealed that Uber is coming up with "fictitious numbers" and its scheme was volatile and critically challenged. He further added that the company, which holds the lion's share of the Chinese market, is now operating in 400 cities and had passed break-even in half of these cities.

Both companies, however, have spent heavily on subsidizing drivers and clients in an attempt to attract more of the market, a strategy analysts claim is unsustainable for long term, according to CNN. 

TagsUber, Didi Kuaidi, china, Tencent, Alibaba