The recent financial crisis, leading to a global economic downturn, the countries have introduced policies to stimulate. However, the level of economic globalization are closely related, in particular between China and the United States, in the joint response to crisis, there are some conflicts of interest. I was surprised to find that, as a master of U.S. investment, but also the U.S. presidential election Obama’s economic adviser, Warren Buffett has publicly expressed its support to China.
In 2009 on the Berkshire shareholders meeting, shareholders, journalists are among the many issues raised, China has also become a shareholder of the General Assembly and get the most attention, everyone wants to know, investment master Buffett how to say abour Chinese stock maeket.. Buffett gives the answer is: the good prospects of China, support China. investment in China.
Buffett optimistic about China
Every year, Buffett’s letter to shareholders in the final, will wrote: “we are very fortunate that we were born in the United States.”
Many people like to deify Buffett, Buffett is very calm but aware of the fact that he was so successful, in fact, just like in the Mark Six, was born in the United States is such a powerful country, just to catch up with the rapid development of the United States such a great era. Other times if it is born in other countries, he smart, and then efforts would not have made such a great success.
But now he believes that Chinese investors also very lucky, was born in an increasingly powerful country, to catch up with an era of growing.
Buffett said: “China has a great future, China’s development, just like a person’s growth and release potential, China is growing, will continue to grow more, it is just the beginning, I will tell all the Chinese people, you are very lucky to live in this era, more than 100 years or 200 years ago much better, there are many good opportunities, economic development will continue, China’s status in the world will continue to rise, China increasingly important on the world stage, last year’s Olympic Games in Beijing is really incredible, and no one will be better than it, the world is found in China, and China are also found in the world. ”
Buffett’s support for China’s
Buffett’s support for China’s first and foremost to support the Chinese officials worry the United States bonds. Chinese government officials recently held a large number of China’s concern about the United States bonds, because these bonds have been dropped. Buffett is right that this judge.
Shareholders asked him to attempt to save the U.S. government practice of AIG, will pay a heavy price for taxpayers when Buffett pointed out that the pay would be a large number of bonds held by China: “The taxpayers have not paid a cent for them. Chinese officials said that the fear of the return on U.S. Treasury bonds, I think he is justified. all contract holders of U.S. dollars overseas, the return will be reduced, which is a major problem. “Insurance is Buffett’s Berkshire Hathaway in charge of the company’s most the core business, while the U.S. national debt is the most important insurance funds Buffett investment vehicle. Buffett and China holds a lot of U.S. treasuries, as he and the Chinese have the same worries.
Buffett said in an exclusive interview with the media: “The United States wants to swap out the balance, the Government of going to the lever, so that people began to keep more money to spend even less, so the U.S. government to promote the economic, non-stop to promote play a great role, and now simply to slow the economy down, the economy is a big problem, a large number of issuing currency would help promote economic recovery, but there is a long-term risk of inflation. We have a saying in the United States that there is no free lunch, everything has its consequences. ”
In fact, in March 2009 Buffett in his letter to shareholders, it more directly: “In the current low interest rates, has been dedicated to the holders of deposits and other long-term government bonds or cash equivalents, if the continued holding of a very long time, then rate of return on investment will almost certainly an alarming low. ”
The second is to support the expansion of domestic demand in China. Turning to the conduct of the United States a large number of debt when Buffett made special mention of China, he said: “They (the Chinese) a day of hard work by the production of products to Americans, and we give them paper. When they want to use These paper, for example, bought a few years to come a time when oil company Unocal, but found that the paper can not achieve the purpose they want. “in 2005 CNOOC Unocal bid, due to obstruction by the failure of the United States.
Buffett further said: “Every year, China’s trade surplus reached 100 million U.S. dollars over 2000, when they found no way to buy U.S. dollars of the things they want, they may ask, why should we export to the United States, rather than their own use?” Buffy Special significantly expressed on China’s policy of expanding domestic demand support. At present, two major problems facing China’s exports, a substantial decline in external demand first, and the other is facing U.S. exports in return for long-term risk of devaluation. Under such circumstances, to stimulate domestic demand, one can make up for the decline in external demand, the second to avoid the risk of the substantial depreciation of the dollar.
Third, support for China’s stable financial system. Buffett said that he will continue to concern the changes in China. Munger appreciation of China has the world’s financial system, one of the best. He believes that the current strength of China and the world is not against the establishment of a solid financial system of China is very important. Recalling the two financial crises, China’s economy has been able to maintain stability, one of the most important reason is that China’s financial system remained stable. The United States economy has continued to experience high-speed history of the development of the need to stabilize the financial system strong support. Significant economic recession in the United States learned of the current show that the loss of stability of the financial system as soon as a crisis or even the impact on the real economy will be enormous.
Buffett’s investment in China
Annual General Meeting was asked Chinese companies to invest in Buffett’s view. Buffett also said he would not have thought a few years ago BYD investment company, nor interested in China’s oil, but now everything has changed. Although a number of policy restrictions, but the company will increase Berkshire’s investment in China. Because China is becoming a huge market, no one can be ignored.
In fact, apart from investment and China BYD oil, Buffett’s investment in China there is a move being overlooked: Coca-Cola to buy Huiyuan.
China’s oil investment is Buffett’s Berkshire Hathaway holding a direct hand, investment is BYD Berkshire’s MidAmerican Energy Holdings hand, investment is Buffett Huiyuan, as a major shareholder of the Coca-Cola first hit, in spite of full acquisition by the Ministry of Commerce rejected, it was reported that the two sides in the talks other.
When the Chinese girls receive the Fruit of Loom underwear and the See’s chocolate gift, you may not know that this is Buffett’s Berkshire Hathaway Inc. The company’s products.
Many Chinese export enterprises to export to the United States Furniture Nebraska Furniture Mart, Star Furniture, Jordan’s Furniture, they are not likely to know that this is completely Buffett’s Berkshire Hathaway holding company.
Buffett’s Berkshire Hathaway company at the end of 2008, net assets of 776.6 billion yuan, total assets of 1.83 trillion yuan, more than 50 affiliated companies, scope of business including insurance, electricity, banking, food, furniture, automobiles, aviation, footwear, jewelry, newspapers, etc., is from the stock market, a number of channels and products enter the Chinese market.
We are most concerned about Buffett on China’s stock market or how to see, especially in the experience after such a fall.
In December 2008 with Chinese journalists to see Buffett, on China’s stock market decline, and asked Buffett on the future of the Chinese market to see how. Buffett said: “I am optimistic about the Chinese market, do not care about the situation in a short period of time. The next decade will surely be China’s stock market in the world.”
Buffett’s confidence in China’s history comes from, but also from the future: In the past 19 years, China’s GDP in 1990 rose to 1.87 trillion yuan by 2008 to 30 trillion yuan, an increase of 15 times, on the Shanghai Stock Index up from 99 points to 2600 points, the highest rise for more than 6,000 points, or nearly 60 times.
The 21st century is the century of China, with China’s sustained economic growth, China’s stock market will rise a hundredfold it?
“China’s great potential, I hope the fact that the potential into the next century, China will become a more prosperous country, I hope that the Chinese are always all the way successful, the development of faster and faster.” Buffett bullish China, we are optimistic about the Chinese people have more confidence in their own country.