The firm, which provides ingredients and contract manufacturing for functional foods, nutraceuticals and animal nutrition products, already has ties with Swansea University.
Welsh economy secretary Ken Skates made the announcement on a trade trip to China, where he is visiting Shanghai and Chongqing.
He joined Acerchem chairman Frank Chen and other company officials to unveil the plans, which will create 38 jobs.
Skates said: “The company has a long standing research collaboration with Swansea University which clearly illustrates the importance of building international academic links with business and industry.
“It’s great news that Acerchem International has chosen to set up its European headquarters in Wales and is to open a manufacturing and research and development centre here, creating a significant number of skilled jobs.
“This investment, which is supported by the Welsh Government, can only serve to strengthen the ties between our two countries. China is an extremely important market for Wales and our trade mission this week builds on the strong economic and cultural links that have been developed over a number of years.”
The investment by Acerchem is backed by £600,000 from the Welsh Government. The company plans to establish its R&D facility in the Institute of Life Science at Swansea University.
Acerchem International Chairman Frank Chen said: “We very much look forward to building up the business in Wales and developing even closer links with Swansea University.
“Support from the Welsh Government helped fast track this project and was vital in bringing it to Wales and we value the support we have had from Welsh Government officials in Shanghai and in Cardiff.
“Opening this new HQ and R&D centre in Wales marks an exciting new development for the group and a great opportunity to develop and grow the business.”
CEO Jeff Jiang founded Acerchem International in Shanghai in 2007 and it has grown into a multi-million dollar business. The company exports to over 40 countries with sales offices in Wales - at the Institute of Life Science, Swansea University - in Japan, the Netherlands and Spain.
With an R&D centre in Shanghai, and working alongside Swansea University, it has developed its own formulations which include premix, blends, tablets and soft-gels for sports nutrition, joint health, cardiovascular health and cognitive health products.