China is betting that patient capital, rather than quick trades, will define its next phase of growth – a wager that has taken on new resonance since Warren Buffett stepped down last week after growing Berkshire Hathaway into a US$1 trillion empire over six decades.
And as global investors watch this week’s US-China leadership summit for any sign of easing friction, one question is whether Beijing’s version of Buffett’s value-investing legacy can help Wall Street regain its appetite for Chinese assets.
“The long-term return nature of Berkshire’s philosophy coincides with China’s economic philosophy,” said Tommy Ong, managing director of Hong Kong-based T.O. & Associates Consultancy.
After Buffett, now 96, announced his retirement plans last year, Wu Qing, chairman of the China Securities Regulatory Commission, declared that the billionaire’s emphasis on “long-term value investing, rational investment, and striving to reward investors will never retire”.
Regulators are also reshaping the country’s roughly US$4.5 trillion mutual fund industry, shifting incentive structures away from short-term speculation and towards longer holding periods.
“China is treating long-term value investing not as a legacy strategy, but as a national financial objective,” said Bruno S. Sergi, an instructor at Harvard University with expertise in development economics and emerging markets.
Policymakers, he explained, want investors to back priorities such as advanced manufacturing, electric vehicles and industrial upgrading over quick trades.
Berkshire’s own exit from BYD last year put that philosophy to the test. The firm closed out a 17-year holding that turned an initial bet of roughly US$230 million into more than 20 times its value – one of the most profitable foreign investments in Chinese corporate history.
Sergi also pointed to how Berkshire abruptly cut its holdings in Taiwan Semiconductor Manufacturing Company (TSMC) just months after purchasing a multibillion-dollar stake in late 2022, and then started adding to Japanese trading houses. But Sergi characterised the move as broader caution about geopolitical exposure rather than a verdict on China alone. Buffett himself was widely quoted in April 2023 as saying that geopolitical tensions were “a consideration” in Berkshire’s decision to unload TSMC shares.
Even so, that high-profile exit deepened doubts among foreign institutions that were already weighing political risks against a thinning pipeline of new listings.
“They are more cautious now, due to the political-risk consideration,” said Kevin Chen Kaifeng, chief economist at Horizon Financial in New York.
He pointed to Chinese companies that listed in the US in numbers of roughly 50 to 60 in each of 2024 and 2025, against just two so far this year, leaving investors “very little to choose from”.
Some big names are buying anyway. Appaloosa Management’s David Tepper nearly doubled his stake in Baidu to about US$148 million last quarter, according to regulatory filings, while billionaire investor Stanley Druckenmiller’s Duquesne Family Office returned to Chinese stocks for the first time in more than two years with a US$10 million position in the same company.
Foreign holdings of yuan-denominated Chinese stocks tracked under the Qualified Foreign Institutional Investors (QFII) scheme jumped 87 per cent to about US$40.6 billion last quarter, according to data provider Wind.
Attention now turns to President Xi Jinping’s three-day state visit that kicks off on Wednesday, with tariffs, rare earth supply chains and AI development controls likely on the agenda.
Some analysts suspected that the summit was more likely to move sentiment than substance, at least in the near term. “A summit can improve sentiment for a quarter; only policy clarity can improve capital allocation for a decade,” Sergi said.
Ong at T.O. & Associates further noted that a dearth of surprises in near-term economic performance and policy support – the type of developments that exceed market expectations – remained a barrier to US investors. Broader appetite, he said, would return only “if US investors see a large stimulus package from China”. -- SOUTH CHINA MORNING POST
