Renault and Dongfeng Motor Group are the subject of a new joint venture backed by China.
The 7.76 billion yuan (£778 million) deal will see the companies produce 150,000 vehicles and engines a year.
China is already the largest car market in the world, but Renault does not yet have a facility there. It is one of the few major manufacturers to not have a presence in the Asian nation.
The 50-50 joint venture is going to be named Dongfeng Renault Automotive and comes after China set up similar deals with firms such as Honda and Nissan.
Vehicle sales in China have been rising much harder than in most of the world and were up by 4.3 per cent in 2012 to 19.3 million, reports BBC News.
The share price of Dongfeng Motor Group Company was down slightly today (December 5th), recording a 0.65 per cent drop for the session.
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