California Governor Arnold Schwarzenegger announced on Friday that Chinese manufacturer BYD Auto Company Limited (BYD) will locate its North American headquarters in Los Angeles.

BYD is the first major Chinese mass-production automobile company to set up a headquarters in the United States, the governor said.

Its decision to choose California was based largely on the state's commitment to nation-leading green policies that create long-term demand for renewable energy automobiles and products, Schwarzenegger said.

The decision is expected to initially create up to 150 jobs in California, according to the governor.

"California's market-friendly energy and environmental policies are playing a vital role not only in making California more energy secure but also in bringing companies like BYD to our state," said Schwarzenegger.

"Like California, BYD is a company of firsts. They are leading China and the rest of the world into a cleaner, more sustainable future with their automobiles and renewable energy products while creating jobs and saving consumers money. I welcome BYD with open arms and look forward to growing California's relationship with China to mutually benefit the environment and economy."

BYD's Los Angeles headquarters will be responsible for sales, marketing, and research and development for its automobiles and energy products, which include solar panels, LED lighting systems and home and grid level energy storage units through BYD's unique iron-phosphate batteries, Schwarzenegger's office said in a statement.

Schwarzenegger has developed a strong relationship between California and China that focused on protecting the environment and growing the economy, the statement said.

From collaborating on the Green Chemistry Initiative to monitoring and reducing air pollution and sharing energy-efficiency techniques, California is working closely with China to share environmentally-friendly and economy-building policies, said the statement.

BYD's decision to locate its North American headquarters and create jobs in California further strengthens this green relationship, the statement said.