The 18-month deal will run until the end of the 2016/17 season and see MG Auto promoting itself as the club’s official Chinese automotive partner.
As part of the arrangement, Liverpool players Philippe Coutinho, Adam Lallana and the captain, Jordan Henderson, will appear in a televised advertisement for the company which will air early next year.
MG Auto is planning to launch a Liverpool FC-themed vehicle, the MG GS, to celebrate the partnership.
The deal comes as Liverpool have reportedly been looking to China for investment and sponsorship of their redeveloped main stand at Anfield.
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