An electric car made by China's Dongfeng motor group on display in Shanghai
China has approved a joint venture worth some 7.76 billion yuan ($1.27bn; £778m) between its second-largest car maker, Dongfeng Motor Group, and French car manufacturer, Renault.
The new venture plans to build 150,000 vehicles and engines a year.
China is the largest car market in the world and Renault is one of the few big car makers that does not yet have a facility there.
The 50-50 joint venture will be called Dongfeng Renault Automotive Co Ltd.
Dongfeng is state-owned and has existing partnerships with Honda and Nissan, amongst others.
Renault's joint venture with the Chinese giant will see it enter a crowded marketplace filled with competitive local brands.
While car sales in Western countries have been waning, Chinese sales have been growing.
Official figures showed vehicle sales rising by 4.3% in 2012 to 19.3m.
Under Chinese trade laws, foreign carmakers looking to launch manufacturing operations in China must have a local partner.
Approval was granted for the new venture between Renault and Dongfeng by China's National Development and Reform Commission.
- Published14 October 2013