Under their agreement, China Enterprise, a provider of IT services and a subsidiary of Hong Kong-listed Sino-i Technology Ltd. , has been authorised to sell the Google AdWords service -- used in markets around the world -- in China.
Sino-i Technology shares were up 6.47 percent at HK$0.148 on Monday, after rising as much as 11 percent.
"By aligning with CE, with its leading position in China's e-commerce and (small and medium enterprise) market and large customer base, Google can now provide... businesses in China with easy access to Google AdWords," the companies said in a joint statement.
AdWords allows advertisers to pay to have their ads appear on a results page when an Internet user searches for particular words on Google.
The partnership is the first to be announced by Google since it received a business license earlier this year to operate in China, the world's second-largest Internet market with more than 100 million users.
Google is in the process of formulating its China strategy, including expanding staffing for an eventual permanent office and staff in the country despite its relatively late arrival.
Rival Yahoo Inc. made its big move into China in 2003, with the $120 million purchase of a popular local search site, 3721.com.
Google already owns a 2.6 percent stake in leading Chinese search engine Baidu.com , whose shares more than quadrupled on their debut after the Beijing-based firm's IPO last week -- the best debut on the Nasdaq since the dot-com era.
Google is believed to have tried to increase its stake in Baidu prior to the IPO, but was rebuffed by the Chinese company.
California-based Google is now trying to formulate its next step in China, deciding on whether to wait for a new chance to boost its stake in Baidu or to forge ahead in a market where it already enjoys strong brand recognition despite its late arrival.