Rover said a joint-venture operation to make vehicles from kits supplied from the UK was the most likely option. Earlier this month it opened such an assembly plant in Bulgaria.
Increasing affluence and economic liberalisation is making China a battleground for motor manufacturers wanting to tap into a potentially huge market.
German automobile companies have so far been the most successful in gaining a foothold in China and the establishment of a Rover factory would be closely linked to BMW's ambitions for its own marques.
Horst Teltschik, a BMW director, said his company plans to build cars and motorcycles in China over the longer term. However, he believed China was unlikely to grant any new production licences for foreign manufacturers before 1996.
Last year the Chinese motor industry produced about 250,000 cars and 1.3 million trucks and commercial vehicles. Car production is forecast to rise to 3 million by 2000, and 4.2 million by 2010.
Volkswagen has had the most success so far, with its joint venture expected to build 160,000 Santana saloons this year, about 40 per cent up on 1994.
Rover's ambitions are likely to be more modest with output closer to single figures, although this will depend on the models the authorities favour. There is talk that the next five-year economic plan will include proposals to promote development of a family car.