The Chinese require about 100 small satellites over the next five to eight years. The university established Surrey Satellite Technology Ltd in 1985 to take advantage of such foreign markets.
Martin Sweeting, director of the Surrey Space Centre, a 25-year joint venture company, said: "SSTL is the first foreign company to establish a joint venture in this market, which will give us access to business worth some Pounds 300 million."
SSTL now employs 150 people to help develop cheap, lightweight satellites that can be built quickly.
For the past five years it has been trying to persuade several Chinese space organisations of the advantages of such satellites, before settling on Tsinghua University.
Professor Sweeting said: "Tsinghua is the right partner for us. It is the best university in China. Although they had no prior space experience, they were keen to develop into space."
In September Surrey University signed a Pounds 3 million agreement with Tsinghua to build a global network of satellites to monitor natural disasters.
Eight Chinese researchers will arrive at Surrey this month to build the first demonstration satellite for this constellation. Due for launch next year, the satellite will also carry out communications research in its low Earth orbit.
Once it has been completed, the Chinese researchers will return to a new research centre created by the two universities in China. They will establish the new joint-venture company from there with help from visitors from Surrey.