The historic deal was reached following negotiations between Carmelo Ezpeleta, the chief executive of marketing company Dorna Sports which manages the MotoGP series, and Li Chang Shuan, the governor of the Yanquing province.
The basic contract was signed by Dorna Sports, the China Panthere Corporation and the China Grand Prix Bureau - the latter firm to take responsibilty for the organisation and promotion of the event - and incorporates an immediate collaboration between the three parties and initially lasts until 2010.
The new purpose-built track will be constructed only a matter of 40 kilometres away from the Great Wall of China and will be a 24,000 square metre facility which can hold up to 500,000 spectators -the highest capacity sporting arena in the world.
The circuit will host around a dozen major events every year including a live broadcast of the opening and closing ceremonies of the 2008 Olympics which are being held in China. Work on the site is expected to be completed within eight months by a workforce of around 20,000 labourers with the first MotoGP event in China scheduled for 2004.
The deal also includes the provision of the live broadcast rights to the MotoGP races to China's public broadcaster Central China TV (CCTV), beginning with the Czech Republic Grand Prix this August.
Said Ezpeleta: "This is an historic day for motorcycling and I would even go as far as to say for the world of sport."
The deal provides further evidence of the growing commercial appeal of China to sports organisations.
