German automaker Daimler has announced a new framework agreement with China’s BAIC for the production of electric vehicles in China, reports Electrek.

German Chancellor Angela Merkel and Chinese Premier Li Keqiang were present for the announcement of the deal, which includes plans for Daimler to become a minority stakeholder in BAIC subsidiary Beijing Electric Vehicle Co.

The interest in China’s EV market is no doubt motivated in part by the country’s requirement for zero-emission vehicles to represent 8% of new car sales by 2018, and 12% by 2020.