What links Goldman Sachs and BYD, a battery maker in the Chinese boomtown of Shenzhen? The answer is Warren Buffett, who has stumped up capital for both companies. Naturally, BYD’s handout was more modest ($230m for a 10 per cent stake) but the immediate rewards for fellow shareholders were bigger: on Monday, after the deal was announced, BYD shares leapt more than 40 per cent. As Mr Buffett’s involvement suggests, the two companies share more than a common investor. BYD is a smart operator with its own “black box” magic – in this case, battery technology that it is leveraging in its development of hybrid and electric cars. This is a big buck game, in terms of both research and development and car plants, and BYD has been looking to raise cash.

As Goldman discovered, an upfront investment from the Sage of Omaha smooths the path for broader equity issuance. Another similarity with the US firm is that BYD comes with plenty of risks. It is a minnow taking on the giants of the auto industry, including Toyota of Japan. It faces legal action from a Taiwanese rival in the handset industry over intellectual property infringement. Sales of handsets, another part of BYD’s revenue mix, are stuttering, judging by signals from Sony Ericsson.