In most small countries, word that both of its two flagship car brands were poised to get new Chinese owners would probably cause an outcry.

But in Sweden, Wednesday's reaction to word that China's Beijing Automotive Industry Holding Co had agreed to become an investor in General Motor's Saab barely raised a shrug. This followed close on the heels of news that China's Geely Automover was the only confirmed bidder for Volvo, which Ford Motor is considering selling.

Asked for her reaction Maud Olofsson, Sweden's enterprise and energy minister, told the Financial Times that the ownership of Saab "is not a business for the Swedish government".

A government spokesman went further, saying BAIC's involvement could be good if it helped Saab – which sold only 98,000 cars worldwide last year – break into one of the world's largest car markets. "If you look at other Swedish companies that have gone into co-operation with Chinese companies, they have worked well," she said.

Labour unions were also relaxed about the deal. Aleksandar Zuza, an official at the IF-Metall union which represents Saab workers, said it was a "good sign" that the Koenigsegg consortium buying Saab had secured additional financing and potential access to the Chinese market.

If anything, the deal could prove more controversial in China than in Sweden. Intense rivalry exists between BAIC and rivals such as Shangai Automotive and First Automobile Works, both of which have joint ventures with GM.

China's government opposes hasty international expansion by its carmakers, which it wants to consolidate into larger companies and improve their vehicle quality before they buy overseas assets. Foreign acquisitions require government approval.

While governments in the US, France, Germany and elsewhere have poured billions of dollars into direct aid or scrappage subsidies to prop up flailing carmakers, Sweden's centre-right government has been tough toward pleas for help from its industry, dominated by GM-owned Saab and Ford's Volvo.

BAIC's agreement with Koenigsegg came after the government refused the Swedish supercar maker's request to provide financing needed to close the purchase of the lossmaking brand from GM. BAIC had looked at Saab after GM's decision to sell it earlier this year, but failed to make a shortlist.

The agreement announced on Wednesday will see Saab's new owners form a joint venture with BAIC to sell and later produce the brand in China. BAIC will probably also use some of Saab's technology in its own cars, a person close to the deal said.

For BAIC, Saab's appeal lies in its knowhow in building models such as the all-new version of its flagship 9-5 sedan due to debut in Frankfurt next week. The brand, headquartered north of Gothenburg, will come with an engineering and design staff of about 1,000 inherited from GM.

"Chinese manufacturers are hoping to buy up technology that will help them catch up to world standards on both the product and the development side more quickly than they would on their own," said Christoph Stuermer, automotive analyst at IHS Global Insight.

Koenigsegg's acquisition of Saab still hinges on the carmaker securing a loan worth c400m-c500m from the European Investment Bank, which requires a Swedish government guarantee. Stockholm has indicated it is willing to offer such a guarantee, but ruled out additional support.

Geely's bid for Volvo, if successful, could provoke more controversy than a BAIC deal as the Chinese carmaker is seeking 100 per cent control of the much larger carmaker. Some Swedish government officials have expressed reservations amid worries about job losses and intellectual property leakage to China.