Warren Buffett, Berkshire Hathaway chairman/CEO says the relationship between U.S. and China will be bumpy at times, however the two countries will align interests over time.
Full video and transcript:
and we probably should talk to warren at some point, whenever you want, becky, about china. i read — i can’t remember where it was over the weekend. we see in the weekend wall street journal or the times. you can’t help it. with the social media, 1.3 million people are finding out more and more about property rights and freedom and they’re trying to figure out ways to censor a lot of this. i saw gary locke was over there. he’s like a welcoming hero. he comes in there. people — you know, when huntsman was there, no one did anything. there are crowds showing up to see gary locke. and in and out government sish ewi is issuing the press reports about this guy, you know, he’s a fake. he is chinese. but don’t think that this is the way we should be. and it’s causing a lot of angst among the chinese leadership that an american who is, you know, a couple generation moves from china is being so — the adulation he’s getting. so i don’t know. we got to talk to warren about whether that’s really imploding at some point. yeah. forget about all that. no, just kidding. why don’t we start on that? we have other stuff to talk about, too. we’ll recap the ground we covered over the last two hours. joe brings up a great point, warren. you look at china and the country the way it’s been run to this point. what do you think? you spent a lot of time in china recently, too. i am no great expert on it. they’re going to have tensions within china just like we have tensions within this country. you know, our income disparities and the widening income disparities cause a lot of tensions in the united states. but china and the united states are going to be the two big factors in the world over decades to come. and they’ll be unhappy with things we do when we tell them they can’t buy unical or something of the sort. and we’ll be unhappy with things they do. there’s things in our society that took us centuries really to get straightened out. the 19th amendment, what, 1920 or something like that. i mean it took us a lot of time to work out things. and a civil war even in one case. so don’t expect the progress of any huge society to be, you know, totally without some bumps here and there. but china and the united states over time will largely get along. we largely have the same interest. we both have nuclear bombs. and not in our interest to start getting really furious with each other. and there will be tensions. we’ll want to play the game our way. they’ll want to play the game their way and we’ll both have to get them in some cases. i’ve been to china with you and boon pickens in the past. and the common threads for american businessmen going overseas go,,ing to china is that, wow, it’s a lot easier to get things done here. that’s for sure. to get through regulations quickly. the central planning is a big boost if you’re trying to get something done very quickly. if that starts to be affected or impacted by the changes that are taking place in china, is china less attractive investment area? well, they will have more difficulty with that as they go along. but this he do have — when they want to get something done and you get the government and business and others on the same page ready to do it, you’ll build over there things in the period that will take us three or four times as long. and we build factories over there. we’ve seen it happen. and so as people get wealthier, you know, they start casting their eyes about and they don’t get more satisfied. they get more dissatisfied. that happened in the united states. right now, we have six times the gdp per capita in real terms as when i was born. now i don’t know whether people are happier now or more discontent or what they were in 1930, but people have a way of adjusting very quickly to things becoming better and then any little tiny adjustment downward. they can get quite unhappy about it. they’ll have — they’ll have plenty of strings in their society. we should mention while we’re talking about china, but the shares were up 26% today on news that the chinese government is making it a little easier for the new fuel vehicles. it has been a very volatile investme investment. is it a good investment without the government pushing for some of these new fuel economies or new fuel vehicles? well, charlie is the expert on that, my partner charlie. i wonder how successful they are. are. and there are remarkable things. there have things to be done. charlie fields is a very good bet. joe, did you want to follow up on the china angle with that, too? i mean i — i — there’s a couple answers warren gives i find a little bit unsatisfying. but i understand what he’s saying. i don’t know if i’d ever compare the income xpadisparity issues t front and sent we are what the chinese people have to live with on a daily basis, warren. but then again, it’s a totally different culture. it’s impossible for me to really — i’ve never been there. kint p i can’t put myself in that place. maybe it’s not as big a deal. tiananmen square and bullets and total censorship and no property rights and one-tenth maybe the gdp per capita that we have. i — there’s no way that i could ever say that our problems were in any way as bad as what some of the average chinese have to put up with. that’s what i was thinking, warren, when you said that. it seems to really minimize — sooner or later they’re going to have a much bigger — want to have a much bigger say in their own lives. we have our problems. but i just can’t imagine you’d say that it’s similar to our income disparities equivalent to the absolute human rights disaster in chib rigna right no. we had our own human rights issue. i know, we’re talking about now. no, i would say they’re really coming off 40 years essentially of a real history. i mean for centuries they were stuck in the same place. right. and they’re 40 years into the lying of what i consider the present chinese country. and 40 years into our country and we have slavery. we have — so i wouldn’t expect them to accomplish in four years what it’s taken us 200 years to accomplish. but it’s being thrust upon them by technology. and they don’t — you know, back during the civil war, we said how long did it take to get news to travel a couple hundred miles. look what they’re dealing with. i have 1.2 million people coming into the 21st century. boom, like that. i just wonder whether that’s a bigger problem for them to try to manage. but like i said, i think a lot of people are happy with the pacest p of the progress over t. kupt grow much faster than 10% a year. no. and we were 7 o years into our country before we tackled the very big problem. and we tackled it in a very tough way. no, listen, all countries keep evolving. i think we’ve evolved in the right way over the years, obviously. it took us a long time to do it in many areas. but something like the arab spring ever get started though, i just don’t know. you know, whether — there are so many local, i guess, political officials there that are sort of have a vested interest. in that gary locke piece, i was amazed. the chinese people were amazed that he would take a normal car, that he would wait in line to do something. these bureaucrats in china are riding around in limos. their kids have ferraris. i mean there is still a lot of things that the chinese people — that for gary locke to look like almost a, you know, a paragon of where they would like to be some day, that shows that the entrenched political system over there is still got — i mean there’s going to be a day of reckonning. well, yeah. there was a day of reckonning in the south during the civil rights movement in the 60s, too. that was 170 years after we started. so where are you dating china? they were a civilization long before we were. i mean you’re giving them the benefit of — what, mao is when they started? yeah. they were stuck — it’s fascinating. i mean they were as smart as we were. they worked hard and went no place for centuries while this country, you know, went from nothing to 25% of the world gdp. now when we had a wonderful, wonderful system. there were flaws in it. but it was a wonderful system. it is a market system. equal opportunity, rule of law, all the things we aspired to. and our aspirations led noose reality over time with these things. but they really — the starting boint them is about 35 or 40 years ago. before that, they were basically a futile society going no place. this is neil ferguson. did you ghaet book yet, civilization? we just had him on. for 500 years, these chummy western countries led the world when they should have killed us. but now they — they’ve downloaded all of our killer outs. and now they’re going to kick our butts because they downloaded all — no. i agree with the first part but not the second part. all right. neil says the only way we can hope to compete is that the one thing that they haven’t downloaded and that is property rights and the rule of law, that that come backs to haunt them. and then on a relative basis we’ll still be able to do okay. but they’ve got some — with the other five they have downloaded, they’re going to be a foremidable force for the next 50 years you’d think. what’s up? warren, on this economic inequality bit — now you’re looking at me funny, joe. i was cure justice about whether you had a view on whether you were a supporter ultimately of the occupy wall street folks. i think i saw that your son said he was a supporter. i should tell you by the way, i went down and reported in zuccotti park and asked what they thought of the buffet rule and they asked me, who is warren buffett? well, they probably got a point there. no, i don’t — that’s not a huge factor. i don’t even know, you know — i don’t think anybody knows precisely what their major points would be or the leadership would be. that isn’t what is going to change things. but it is a fact that in the last 25 years the forbes 400 list has added net worth increase nine for one. nine for one. and the last 15 years, it’s increased over three for one. that is not happening with the american people generally. and it’s happening during a time when those same rich people have had their tax rates go down, down, down. and i think that when we’re talking to 312 million americans about shared sacrifice and taking away things we promise to them because we’re going to have to do that. we’re going to have to bring the expenditures down to 21% of gdp. and that is going to require a lot of sacrifice around the country. a lot of breaking of promises we made. and i say that it’s time to share in that sacrifice to some degree. you change the social security rules somewhat and millions of people will feel it. and they’ll really feel it. you change the medicare rules and millions of people will feel it. you have a minimum tax of 30 or 35% on incomes of a million, true, those people won’t feel it. but at least the american people as a whole will feel somehow that the overrich have been asked to participate to a small degree in this overall sacrifice that we’re all going to be asked to participate in. isn’t that what occupy wall street is all about though, this feeling that there’s a growing bridge between the haves and have nots? that is part of the feeling. the civil rights movement, yi knew what that was about. but i think the american people feel generally, 76% of it in the recent wall street journal/nbc poll, 76% feel that it’s wrong what has happened what has happened in terms of the tilt in many ways including the tax law for the rich. let ‘s talk more about what was found in that nbc/wall street journal poll. only 19% said they think the country is headed in the right direction. 40% of them said they think things are going to get worse. what does that tell but american people’s sense of what is happening in the economy versus what you tell us you’re seeing in your companies? it’s really fascinating, becky. that same poll — if you go back to october of 2008, when it was clear that, you know, we talk about on this program that what was happening where it was going hit into the business world huge. at that time more people thought things were going to get better in six months than worse. now they think they’re going to get worse in the next six months. what really happened in the last two years, i’m seeing every bit of data i look at is that the economy has generally kept moving forward. business after business. you know, dairy queens to jet airplanes. i gets better. except housing is in a depression. you take housing and put it in a depression and that has a big impact and has a big psychological impact as everybody, you know, 66% of people live in their own homes. and the person next door doesn’t. and then throw that on the unemployment figures which is disproportionately affected by what is going on. and then throw it on. and what is happening in washington and they are discouraged. what you’re saying does reflect what the present move is. you told us earlier this year that you thought maybe we would see a turn in housing about it end of this year. now you’re saying it’s not necessarily there just yet. it’s not. i was wrong. when do you see the turn at this point? is it something that happens before a year from now when we’re looking at a presidential election? no. the president hopes so. yeah. you know every day it’s going in the right direction. when it turns, you know, obviously i thought you would see the turn by the end of this year. and you haven’t. in a sense, that’s good. you would not want some artificial program in place that was causing extra housing starts. it would just delay the solution. we don’t — nice thing about it is we’re not japan. we’re not italy. i mean italy has no problem. we’re a country where households are formed daily in significant numbers. there was a slowdown in 2009 because of the impact of the first recession. that solves itself now. it doesn’t solve itself as fast as people would like. it does solve itself. and the economy which is good in many areas will be very good when that imbalance is worked off.