Why business leaders gathered in Omaha buy Buffett’s optimism on US-China relations – Yahoo Finance

The world’s two largest economies can be competitors without being enemies.That’s according to billionaire investor Warren Buffett, Nebraska Governor Pete Ricketts, and a bevy of business leaders who gathered at Yahoo Finance’s U.S.- China Investor Forum on Friday evening on the sidelines of Berkshire Hathaway’s annual shareholders meeting.Despite a year-long trade feud between Washington and Beijing and China seeing its lowest GDP growth rate in 28 years, investors are maintaining a positive tone on the East nation.“I think that China and the United States absolutely are destined to be the superpowers, beyond my great grandchildren lives, and will always be competitors,” Warren Buffett said in an interview with Yahoo Finance. “We just have to make sure that competition doesn’t get us to a point where we don’t realize that the best world is one in which both the United States and China prosper.”Both sides have learned to negotiateSince the tit-for-tat tariffs that started last June, American businesses have been feeling the pinch of these incremental taxes. Many businesses caught in between the trade war have been trying to move supply chain out from China.2019 Berkshire Hathaway Annual Shareholders MeetingBut that’s not easy, according to Helen Ye, Vice President Global China Practice at Ogilvy Group.“China is the only country to have a full supply chain around the world,” Ye said at the forum. “There’s no next China. It can take years to build a whole region to be the next China.Ye said clients who have thought about relocating supply chains quickly found it almost impossible.View photosChinese Vice Premier Liu He, right, talks with U.S. Treasury Secretary Steven Mnuchin, , USTR and U.S. Ambassador to China Terry Branstad in Beijing, Wednesday, May 1, 2019. (AP Photo/Andy Wong)This week the U.S. and China continued trade talks in Beijing and sent out positive signals ahead of what both sides hope to be the last round in Washington. Investors are expecting an announcement on a signing summit between Chinese President Xi Jinping and U.S. President Donald Trump, which will be held later this month or in early June.The upside of the year-long negotiations, according to Jeffrey Towson, an investment professor at Peking University, is to bring two sides to the negotiation table to deal with an “inevitable” confrontation.“There was not really a great mechanism for the two countries to discuss issues,” Towson said at the forum. “This past year, I think what we’ve seen is the two countries learning to talk to each other about meaningful issues for the first time. And I think this is going to go on for the rest of our lives that these two countries are going to learn to deal with their issues.”Ogilvy Group’s Ye said she had seen more reflections from the U.S. side on what they can do. Meanwhile, China has a long-term development plan in place and is trying to attract top talent across the world.“I found a lot of people in DC start to talk about, ‘Why don’t we look at our homeland, the U.S.? How can we be competitive?’” Ye said. “[The] government can do something to set up a long term plan, and to forge and to attract more talents into the U.S., and to stay on top of the competition.”China “hadn’t remotely achieved their potential”The other issue playing on investors’ minds is the slowdown of China’s domestic economy. In March, the government lowered the growth target to 6-6.5%, due to ongoing structural reforms among other things. At the same time, Beijing has pushed stimulus measures and tax cuts to make sure the economy doesn’t head for a hard landing.Buffett doesn’t seem to be worried by the impact a slowing China could have on the globally market.“China’s going to grow a lot, over time, When you think of what’s happened since 1949, there’s been nothing really like it,” Buffett told Yahoo Finance. “And they really hadn’t remotely achieved their potential.”
Read More


Please enter your comment!
Please enter your name here