In a move that underscores the potential of China’s auto market - as well as the viability of so-called "green" technology - investing guru Warren Buffett’s MidAmerican Energy Holding Co. will pay roughly $230 million for a 10% stake in BYD Co. Ltd., a Chinese producer of both cars and specialized batteries.

MidAmerican is 87.4% owned by Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B), which just last week paid $5 billion for a stake in Goldman Sachs Group Inc. (GS). Buffett’s vote of confidence for Goldman was enough to lure skeptical investors back into the treacherous financial services sector and boosted Goldman Sachs’ shares by nearly 10% over the two days following the announcement.

Similarly, shares of BYD (Build Your Dreams) shot up 42% in Hong Kong Monday following MidAmerican’s decision. BYD’s stock had tumbled 56% since hitting its 52-week high last October.

The purchase also marks Buffett’s first large investment in China following the sale of Berkshire’s stake in PetroChina Co. Ltd. (ADR: PTR) last year. After cautioning investors against the Chinese stock market at a time when it was just beginning to peak, Berkshire sold 28 million shares of PetroChina, netting a profit of about $3.5 billion from what had been a $500 million investment in 2003. PetroChina has lost roughly half its market value since Buffet divested Berkshire’s stake.

Buffett now appears ready to test the fast-growing Chinese market again, and a stake in BYD opens up brand new opportunities for MidAmerican, a diversified energy-products company, and for BYD, a builder of electric cars that has some ambitious objectives.

The global auto industry is just one worldwide business sector pushing to capitalize on China’s tremendous long-term promise. China’s auto market is expected to advance at an 18% clip this year. The U.S. auto market is in the midst of an 11-month slump, its longest since a 14-month slump that took place in 1991.