By Bloomberg News - Sep 30, 2010 1:23 PM GMT+0200 Thu Sep 30 11:23:56 GMT 2010
Sept. 30 (Bloomberg) -- Bloomberg's Stephen Engle reports on a visit by Berkshire Hathaway Inc. Chairman Warren Buffett and Microsoft Corp. Chairman Bill Gates to China. Buffett said the meeting he and Gates had in Beijing with 50 Chinese leaders in business and philanthropy “was a complete success,” according to a release from the Bill & Melinda Gates Foundation. (Source: Bloomberg)
Billionaire Warren Buffett said he expects “large” opportunities in China, making the world’s fastest growing major economy a “logical” place to invest.
“Almost anyone, a third-grade child from America, can see that this economy is booming,” Buffett said at a briefing today in the southern Chinese city of Changsha. China’s transformation is “unlike anything that’s ever taken place in history.”
Buffett, 80, is turning his attention outside the U.S. after his Berkshire Hathaway Inc. bought Fort Worth, Texas-based railroad Burlington Northern Santa Fe Corp. this year for $27 billion in his largest deal. In China this week, he and Berkshire Vice Chairman Charles Munger visited the facilities of automaker BYD Co., part owned by Berkshire, and with Bill Gates met with local business leaders to promote philanthropy.
“China’s a very big economy and it’s going to get a lot bigger,” Buffett said. “That means it has large investment opportunities and that’s what Berkshire Hathaway is looking for. We need to put large sums to work, so China is a logical place.”
Berkshire’s largest acquisition of a non-U.S. firm was Iscar Metalworking Cos., an Israeli company with operations in China and Japan. Buffett paid $4 billion for 80 percent of Iscar in 2006. Berkshire agreed to buy a 9.9 percent stake in BYD in 2008, and last year he injected $2.6 billion into Swiss Reinsurance Co., the second-biggest seller of backstop coverage for insurers.
Economic Growth
China’s gross-domestic product surpassed Japan’s in the second quarter, expanding 10.3 percent from a year earlier, and was second only to the United States. China will overtake the U.S., where annual GDP is about $14 trillion, as the largest economy by 2027, according to Goldman Sachs Group Inc. chief economist Jim O’Neill.
The value of China’s currency, the yuan, wasn’t a consideration when Berkshire decided to invest in BYD, Buffett said today. “The subject of currency never came up and that would continue to be the case today,” he said.
The U.S. House of Representatives voted yesterday for a measure that would let American companies petition for duties on imports from China to compensate for the effect of a weak yuan. The Senate won’t take up its version until after the November election, said Senator Charles Schumer, a New York Democrat.
Munger today declined to comment on the bill, saying “We don’t think that Berkshire Hathaway should be telling the government of China or the government of the United State how to resolve their currency negotiations.” Buffett didn’t address the issue.
Overseas Deals
Li Lu, the hedge fund manager who helped arrange Berkshire’s BYD investment, may push Buffett’s company to make more deals outside the U.S., according to Michael Yoshikami, who oversees about $1 billion, including Berkshire shares, at YCMNet Advisors in Walnut Creek, California. Berkshire’s Munger expects Li, former president of the Student Congress on Tiananmen Square, to become a top investment official at Berkshire, the Wall Street Journal reported in July.
The money manager met Munger after college and the two exchanged thoughts on investing, according to an essay Li wrote for the China Entrepreneur Magazine in May and posted on the website of his hedge fund, Himalaya Capital.
Buffett previously traveled to China in 2007 and told investors then to be “cautious” of China’s stocks after they had doubled in the first 10 months of the year. Berkshire posted record earnings in 2007 as Buffett booked a $3.5 billion profit selling a stake in PetroChina Co. that he acquired for about $500 million.
Sept. 30 (Bloomberg) -- Bloomberg's Stephen Engle reports on a visit by Berkshire Hathaway Inc. Chairman Warren Buffett and Microsoft Corp. Chairman Bill Gates to China. Buffett said the meeting he and Gates had in Beijing with 50 Chinese leaders in business and philanthropy “was a complete success,” according to a release from the Bill & Melinda Gates Foundation. (Source: Bloomberg)
Billionaire Warren Buffett said he expects “large” opportunities in China, making the world’s fastest growing major economy a “logical” place to invest.
“Almost anyone, a third-grade child from America, can see that this economy is booming,” Buffett said at a briefing today in the southern Chinese city of Changsha. China’s transformation is “unlike anything that’s ever taken place in history.”
Buffett, 80, is turning his attention outside the U.S. after his Berkshire Hathaway Inc. bought Fort Worth, Texas-based railroad Burlington Northern Santa Fe Corp. this year for $27 billion in his largest deal. In China this week, he and Berkshire Vice Chairman Charles Munger visited the facilities of automaker BYD Co., part owned by Berkshire, and with Bill Gates met with local business leaders to promote philanthropy.
“China’s a very big economy and it’s going to get a lot bigger,” Buffett said. “That means it has large investment opportunities and that’s what Berkshire Hathaway is looking for. We need to put large sums to work, so China is a logical place.”
Berkshire’s largest acquisition of a non-U.S. firm was Iscar Metalworking Cos., an Israeli company with operations in China and Japan. Buffett paid $4 billion for 80 percent of Iscar in 2006. Berkshire agreed to buy a 9.9 percent stake in BYD in 2008, and last year he injected $2.6 billion into Swiss Reinsurance Co., the second-biggest seller of backstop coverage for insurers.
Economic Growth
China’s gross-domestic product surpassed Japan’s in the second quarter, expanding 10.3 percent from a year earlier, and was second only to the United States. China will overtake the U.S., where annual GDP is about $14 trillion, as the largest economy by 2027, according to Goldman Sachs Group Inc. chief economist Jim O’Neill.
The value of China’s currency, the yuan, wasn’t a consideration when Berkshire decided to invest in BYD, Buffett said today. “The subject of currency never came up and that would continue to be the case today,” he said.
The U.S. House of Representatives voted yesterday for a measure that would let American companies petition for duties on imports from China to compensate for the effect of a weak yuan. The Senate won’t take up its version until after the November election, said Senator Charles Schumer, a New York Democrat.
Munger today declined to comment on the bill, saying “We don’t think that Berkshire Hathaway should be telling the government of China or the government of the United State how to resolve their currency negotiations.” Buffett didn’t address the issue.
Overseas Deals
Li Lu, the hedge fund manager who helped arrange Berkshire’s BYD investment, may push Buffett’s company to make more deals outside the U.S., according to Michael Yoshikami, who oversees about $1 billion, including Berkshire shares, at YCMNet Advisors in Walnut Creek, California. Berkshire’s Munger expects Li, former president of the Student Congress on Tiananmen Square, to become a top investment official at Berkshire, the Wall Street Journal reported in July.
The money manager met Munger after college and the two exchanged thoughts on investing, according to an essay Li wrote for the China Entrepreneur Magazine in May and posted on the website of his hedge fund, Himalaya Capital.
Buffett previously traveled to China in 2007 and told investors then to be “cautious” of China’s stocks after they had doubled in the first 10 months of the year. Berkshire posted record earnings in 2007 as Buffett booked a $3.5 billion profit selling a stake in PetroChina Co. that he acquired for about $500 million.
This story can be a major catalysator for U.S.-listed Chinese stocks!!!!
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