Work has begun the foundations of the £65 million development called New Era Square.
“Chinatown” is being funded entirely by Chinese investment and will feature 20 floors of shops, food and drink outlets, student flats and office space.
In all, the development should feature some 700 student flats.
The scheme was announced in 2014 after Chinese investors looked at London, Birmingham and Manchester and decided upon Sheffield.
The ground floor will have a variety of shops and an outdoor events area.
The first floor will be a business space with offices, an exhibition space and a “business incubator” to strengthen trade links between the UK and China.
Building work on “Chinatown” starts in the same week that international uncertainty in the stability of the Chinese financial markets has caused stock prices to drop globally.
Trading had to be suspended twice on the Chinese stock market.
The UK’s FTSE 100 took a 6 per cent plunge following this market volatility.
Jerry Cheung, Managing Director of New Era Square Development Ltd. was “thrilled” to see the project begin.
Mr Cheung’s original proposal, a decade ago, featured a casino and hotel.