Volvo may end up in China

China is buying into foreign real estate and metals companies. It is expanding the reach of its oil field holdings and investing in foreign energy companies. One area where it has not made significant progress in getting ownership of overseas assets is the auto sector. That may be about to change.

One of China's largest car companies, Geely, is actively considering buying Volvo from Ford (F). Geely would probably make a bid with help from the Chinese government , which has a tremendous sovereign fund that holds $300 billion. The nation also has $2 trillion in foreign currency reserves. In other words, Geely will not have trouble getting financing for the transaction if the central government approves it.