Goldman gets into Chinese car industry

Goldman Sachs (GS) will put $250 million into Chinese car company Geely, according to several media reports. There is speculation that the money could be used for Geely to ramp up its manufacturing, or to make a bid for Volvo. Goldman's investment will be done through convertible bonds.

The capital infusion will probably be one in a long line of foreign capital being put into China's auto sector, if the central government will allow it. However, China may decide that it wants to fund its own car companies so that it reaps the benefit of any returns. Either way, the cash available will be plentiful as it would be hard to find a better manufacturing industry investment anywhere.