Buffett considers investing more in booming China

By Li Fangfang (China Daily)
Updated: 2010-10-01 08:10
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Buffett considers investing more in booming China
US billionaire Warren Buffett stands with Wang Chuanfu, founder of Chinese auto maker BYD, at the company's news conference in Shenzhen on Monday. [Agencies]

CHANGSHA - US billionaire Warren Buffett said on Thursday that he would consider pouring more money into China, citing the nation's continued potential to show robust growth going forward.

"China has large investment opportunities. (I will invest in) any business that I can understand, and if it is available at the right price," said Buffett during his visit to Changsha in Hunan province.

He also said that the Chinese people, especially the country's "fabulous" entrepreneurs, as well as China's booming industrial areas, have strengthened his confidence about the nation.

Microsoft Corp founder Bill Gates, who accompanied Buffett on the China tour, agreed: "I do appreciate the successful people here and I am optimistic about investing in the developing companies of China."

As the chairman of Berkshire Hathaway, which owns 10 percent of BYD Co through Des Moines, Iowa-based MidAmerican Energy Holdings, Buffett came to China to also tour the Shenzhen-based automaker, one of his most successful investments which has shown sevenfold returns since 2008.

During their four-day visit to China, the US billionaires spent five hours at a philanthropy banquet in Beijing on Wednesday.

They also visited BYD's manufacturing bases in Shenzhen earlier on Monday and Changsha on Thursday, and participated in a series of model launches and agreement signing events held by BYD.

Their positive focus and high praise of BYD scotched earlier rumors that Buffett was considering selling his stake in the electric carmaker.

Instead, Charlie Munger, vice-chairman of Berkshire Hathaway, said in a rather roundabout way that to increase the company's stake in BYD was "not impossible at all".

More important, Buffett's China tour is expected to benefit BYD regain its footing after it announced on August 3 that it would cut its annual sales target from 800,000 units to 600,000 units as it had only fulfilled 36 percent of its sales target during the first half.

Due to sluggish sales and high inventory during the past five months, several BYD dealers quit its sales network in August.

Buffett had dinner with BYD's more than 1,000 dealers in Shenzhen on Monday, telling them "BYD is the right choice for me".

"Like the name (BYD stands for Build Your Dreams), let us build our dreams together," said Buffett.

The company's stock closed at HK$62.3 per share on Thursday on the Hong Kong Stock Exchange, nearly 45 percent higher since the lows of HK$43 per share in August.

Wang Liusheng, an analyst with China Merchants Securities, said it was likely that Buffett would increase his stake in BYD after the company outlined its capabilities and technologies in new energy areas.

Buffett and Gates also test drove the company's pure-electric E6 model, witnessed the delivery of the 1 millionth BYD car and the company's deal with China Southern Power Grid to build an energy storage factory on Monday.

The billionaires also unveiled BYD's first MPV model M6 in Beijing on Wednesday, and participated in a contract signing ceremony wherein BYD agreed to provide Hunan province with 1,000 K9 pure-electric buses.