China Investment Corp, the nation's sovereign wealth fund, plans to buy a 4-10% stake in Mercedes-Benz, Yicai.com reported, citing people with knowledge of the issue.
It was reported that Daimler AG sought investment from China as early as July 2011, and the German carmaker confirmed the intention five months later.
The rumor about CIC's interest in Mercedes-Benz first surfaced in February 2012. It was not until recently the real size of the stake was disclosed.
Daimler is seeking partnership with China as the eurozone economy continues to languish, market watchers say.
CIC was founded in 2007 with $200 billion in registered capital, which was raised from government bonds issued by the Ministry of Finance.
Mercedes-Benz sold more than 1.32 million vehicles globally in 2012, up 4.7% from the year before.