The Houston company, which provides drilling services to oil and gas operators, said it will create the joint venture with an affiliate of SPT Energy Group. The venture will focus on hydraulic fracturing and production enhancement services in Xinjiang, China.
Halliburton said the companies have worked together for seven years.
Hydraulic fracturing frees gas from deep rock deposits by injecting wells with chemical-laden water at high pressure.
Halliburton Co. shares lost 59 cents to $68.76 in midday trading. Its shares are up more than 55 percent over the past year.