The scholarships to Oxford University were established in 1903 in the will of Cecil Rhodes, the British mining magnate and founder of Rhodesia, who hoped they would bring future leaders together to better understand one another and avoid future conflicts.
Initially the programme was restricted to 57 students from formerly British-ruled territories, plus Germany, with the lion's share of awards going to the US, although it has since expanded.
"China has an important international role to play in the 21st century, and we wish to reflect that in the global footprint of the Rhodes scholarships," Charles Conn, manager of the programme, said in a statement announcing the expansion.
The first Chinese students will be selected this year and enter Oxford in 2016.
Rhodes alumni include former US President Bill Clinton and current Australian Prime Minister Tony Abbott.
But while foreign universities are rushing to establish satellite campuses in China, the announcement comes amid questions over academic freedom in the country, with Beijing vowing to ban university textbooks which promote "Western values".
China's education system is Communist-controlled, raising questions over the possibility of official influence on the selection process.
Chinese students are studying abroad in ever-increasing numbers as universities seek new sources of funding and increasingly rely on the high tuition rates paid by international students.
At the same time, Beijing has worked to shape its image on university campuses abroad through Confucius Institutes, which provide subsidised language instruction but have been criticised for silencing discussion on topics the Communist Party deems sensitive.
The new Chinese Rhodes scholarships will be funded by donations by Hong Kong businessman Li Ka-Shing's foundation, according to the statement.
Alvin Jiang, grandson of former Chinese President Jiang Zemin, worked to secure additional donations, The New York Times reported, citing the Rhodes Trust.
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