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
Michael Haines said he wanted to continue his brother's legacy so he would be remembered for his good work rather than his death.
Tomorrow should be a bit quieter in most places, with lighter winds and some lovely winter sunshine.
There will be a widespread frost and ice to watch out for tonight, with some bitterly cold temperatures too.