CRI听力: Goldman Sachs Financing Geely

Anchor: The rumored Volvo-bidding Chinese car manufacture, "Geely Automobile" is making yet another big move expanding its business, and the name attached this time is Goldman Sachs.

Huangrui has the story.

The Hong Kong listed company, Goldman Sachs, is financing some 2.3 billion Yuan with Geely Automobile. This puts Goldman Sachs. in position as Geely's 2nd biggest shareholder, holding 15 per cent of the company's shares.

The Chinese car manufacture is rumored to be purchasing Ford's Volvo unit. Li Shufu (李书福), board chairman of Geely stock holding says the move has nothing to do with a rumoured purchase of volvo.

"This financing is mainly for recent domestic investments, for our recent product placement, it's not at all relative to overseas purchases."(www.hXen.com)

Li Shufu's explanation may not actually be a game of hide-and-seek with the media, becausethe financing from Goldman is too small to purchase Volvo.

Automobile industry expert Jia Xinguang(贾新光) says this action with Goldman is short-term financing. And Not meant to finance the purchase of Volvo, nor it is the right time to do so.

"Purchasing Volvo is not a clear yes-or-no deal anymore. Ford's business is showing signs of recovering, and no longer in need of a "quick withdraw", I think the best time to make the purchase has passed. "

Jia Xinguang(贾新光) says Goldman's involvement will help Geely if a real bid to purchase volvo is made.

"There are doubts about Geely's capital and whether it is capable of buying Volvo, without Goldman Sachs' financial support, it will make Geely's bidding more credible."

Geely says Goldman Sachs's support is key for its expansion, Goldman's capital ability and diplomatic relationships with western countries will play a big part in the company's attempt to become global.

"Goldman Sachs' Global platform of business activities; their policy directive as far as our company's concerned; their experiences with global trading; and further capital investments are huge advantages they can bring to our table, what Goldman brought to us it is not just a matter of money."

However, industry experts say that although purchasing an overseas car maker seems glamorous, it is still too much for the home manufactures to handle. The lack of international trading experiences and overall producing capability is the bottle-neck for a global expansion. But that doesn't deny all routes of expansion. Jia Xingguang(贾新光) says domestic incorporate of car manufactures might be a solution of much more credibility and necessity.

"Even though our sales numbers are rapidly raising, our producing system still is developing at a very slow speed, that will weaken our market's ability to compete within the global market, when the economic downturn is over. Domestic companies incorporated under better circumstances will lead to a more united and a healthier market."

The Chinese car market is looking good when all the rest of the world isn't, but changes are compulsory to maintain a continued success, Geely's partnership with Goldman Sachs may be seen as a positive approach for some, but for the whole industry, more is needed.