An engine production facility as well as a research and development centre will built as part of the venture, with a main manufacturing plant expected by 2014.
The work can go ahead after the Chinese government approved a licence for the new partnership.
The company is looking to expand in the China's booming economy, with sales of Jaguars and Land Rover rising by 80 per cent in China so far this year.
More top news
The cyclist said the victory was as sweet as his first win as he became the first Briton to win the race three times.
Local police confirmed the explosion, which occurred near Nuremberg.
Temperatures slide a couple of degrees