The Confucius Institute, named after the Chinese philosopher, is based at Cardiff University.
With 73 similar institutes in Europe, it is the second to be opened in Wales.
Welsh Secretary Paul Murphy said the institute was "hugely important" and would forge strong links between the two "dragon" economies.
The institute is a collaboration with Xiamen University and its head, Professor Siyi Fu, has relocated to Cardiff for at least two years as the director.
Professor Fu said she would like to extend the range of Chinese classes once the venture had established itself.
"The major task for the Confucius Institute is to enhance and teach Chinese culture and language.
"It's all about getting to know business partners and building relationships"
"Today is the beginning of spring in the Chinese calendar - so it is an auspicious day to launch the venture," she added.
One of those who has already attended a course is Robert Lock from International Business Wales (IBW), which helps companies trade with or establish operations in Wales.
He deals with companies interested in the Asia Pacific area and has already visited China 10 times.
He attended a Chinese cultural training course to help him with establishing relations and understanding business protocol.
Mr Lock said he had learnt about the importance of customs and the significance of colours and numbers for Chinese.
As an example, he cited the summer Olympics in Beijing which are scheduled to open on 8/8/08 at 8:08:08, because the number is considered lucky.
"It's all about getting to know business partners and building relationships," Mr Lock said.
"It takes three times as long and it's three times as expensive (to form partnerships with Chinese companies) but once you've started you may get fruitful years of long term business."
Mr Lock said IBW has organised two trade missions to China last year, one to the Pearl River Delta and Hong Kong and the other to Shanghai and Beijing.
He said more than 20 Welsh companies had benefited from the visits.
In March, Mr Lock added, the First Minister Rhodri Morgan would visit Chongqing, China's fourth municipality after Beijing, Shanghai and Tianjin.
He said a "Welsh week" would be held there culminating with the area - with a population of 31 million becoming a sister region for Wales.
This year, Cardiff celebrates 25 years of links with its twin city Xiamen. The university says that exports to China from Wales in 2005 stood at £178m, having quadrupled in seven years.
During the launch, Mr Murphy's first public event as Welsh secretary said both the capital and Swansea had attracted significant Chinese communities.
"Like China, Wales is the land of the dragon. Within 20 to 30 years, China is set to be the largest economy in the world.
"This remarkable growth should be celebrated as an opportunity and not threat to nations like Wales."
At the launch of the institute, which us based at the university's centre for lifelong learning, Mr Murphy said he had no doubt that forging of educational and business links would help "the blossoming relationship between Wales and China continue to grow and strengthen."
The other Confucius Institute in Wales is based at Lampeter University.
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