After 20 years of successful cooperation the Volkswagen Group and its Chinese joint venture partner First Automotive Works (FAW) are extending their present partnership for a further 25 years, until 2041.

In addition, the Volkswagen Group and Chinese joint venture partner SAIC are investing in the Shanghai Volkswagen (SVW) proving ground in Xinjiang province, western China. Both agreements were signed in Berlin during a visit by Li Keqiang, premier of China.

Based on the extended cooperation, Volkswagen and FAW will be able to significantly expand existing research and development activities in China and move into new business areas in the coming years, above all in the field of alternative drive technologies, VW said in a statement.

Back in July, Volkswagen and FAW agreed to expand their production capacity by building two new plants in Qingdao and Tianjin.

Volkswagen is further expanding its activities in western China - and is joining up with SAIC to spend some EUR100m (US$126.3m) on a new proving ground in the Xinjiang region to test models from Shanghai Volkswagen. The facility will be built to the south east of the Urumqi plant commissioned in August 2013. A joint agreement has also been signed to this effect.