The new space centre, to be managed by the State Administration of Science, technology and Industry for National Defence (SASTIND) and the Chinese Academy of Sciences (CAS), will track and monitor near-earth objects and space debris.
It will also be used to develop emergency response plans, take measures in case of emergencies, and share data with international counterparts, state-run Xinhua news agency reported.
Xu Dazhe, head of SASTIND, said the centre will utilise existing observatory facilities in China while taking advantage of surveillance data from both home and abroad to set up its own monitoring network for space debris.
An emerging space power, China launched numerous satellites in space including its global positioning system called Baidu and sent several lunar missions. It is also currently in the process of building its space station expected to be ready by 2020.
Space debris is generally man-made litter left in space: parts of rocket launchers, inactive satellites and broken remains of past collisions.
More than 300,000 pieces of debris in space are believed to be in orbit, made up of everything from tiny screws and bolts to large parts of rockets, travelling at average speeds of 10 kilometers per second - about 40 times faster than the typical atmospheric aircraft.
At that speed, even the smallest pieces of debris can damage or destroy spacecraft and satellites, the report said. China now has 129 spacecraft orbiting the Earth, including the Tiangong-1 space station put into orbit in 2011 for an anticipated two years.
According to Yan Jun, head of the CAS astronomical observatory, China has registered an average of 30 incidents each year where pieces of space junk have come dangerously close (less than 100 meters) to Chinese spacecraft.