CISDI Group, which builds steel factories, chose the city over New York and Dusseldorf to launch a subsidiary to serve Europe and the USA.
The Sheffield office will provide engineering design services and be the purchasing hub for the group - which is forecasting revenues of £1.49billion this year - sourcing components and equipment for plants worldwide.
Bosses say they expect to place orders of up to £7m a year - and buy locally where possible.
The firm has ploughed £1m into refurbishing the former PlusNet headquarters at Victoria Quays. Some seven jobs have been created but there is room for 50.
Zhaohui Yu, chairman of the state-owned group, will arrive in Sheffield from South West China on Thursday to open the new office.
CISDI UK managing director John Lester said the decision demonstrated a new respect for the region’s steel heritage.
Where once China sought to replicate what its engineering companies produced, now it was buying into their world-wide reputation for excellence.
He added: “The steel heritage, the wealth of highly-skilled, metallurgically-focused workers and strong educational facilities were a major contributing factor. So was the encouragement shown by the city council. Creative Sheffield has been amazingly supportive.
“One of the main functions of the company is to procure hi-tech engineering components, which will be integrated into steel plants worldwide, and ideally we want to buy them here.
“We are welcoming approaches from local firms producing bearings, seals, pumps and motors - all the clever stuff CISDI needs for the huge steel equipment it creates.
The group is part of the Metallurgical Corporation of China, a Fortune 500 company and a contractor in the construction of the ‘Bird’s Nest’ Olympic stadium in Beijing.
Coun Leigh Bramall, Sheffield City Council deputy leader and cabinet member for business, skills and development, said: “We’ve been working with CISDI for over 12 months and are delighted it chose Sheffield over Dusseldorf and New York.
“It is testament to the pull Sheffield has for overseas investors and the excellent work of our Inward Investment Team, our advance manufacturing and engineering output, geography, transport and our workforce skillset. CISDI is a great asset to the city.”
* CISDI supplies complete solutions - from feasibility studies through engineering, to turnkey equipment supply for steel producers worldwide. The projects it works on are of huge scale - CISDI was responsible for the independent design of China’s Panzhihua Iron & Steel Corporation, and the plant design of Baosteel.
It is currently building a steel plant in Vietnam capable of producing 22.2 million tonnes of steel a year.
The Sheffield office will combine UK engineering, R&D, QA/QC management and premium brand UK/European components together with low-cost steel fabrication and assembly in China for the global market.