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.
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The Labour leader said newspapers were going "a little bit James Bond" over the "increasingly wild and entirely false" claims.
The "astonishing" find was made during an excavation at Vindolanda, near Hexham in Northumberland.