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Back in the early 90s, when Warren Buffet owned a $1.5 billion position in McDonald’s stock, he called my office and asked for a little help. It seemed that he and his friend Bill Gates and their families were planning a vacation trip to China, and had chartered a Chinese train to carry them across the country. Buffet was a McDonald’s fan, and asked if we could guide him to our restaurants along his route. We helped make it easy for he and his party to drop in at a McDonald’s whenever their hunger for hamburgers and fries arose. He talked about that trip for years.

By 2008, Buffet had invested $200 million in Chinese transportation, in a major Chinese car company, BYD, which was developing technology and production capability to build electric cars. By the way, BYD means Build Your Dreams. Really. BYD is slow getting off the mark, but they may yet become a factor in the electric car revolution.

Now, in 2012, Buffet appears on Chinese State Television, wishing the country well in their Year of the Dragon Chinese New Years celebration.   And then he appears, in the same broadcast, playing his ukulele ( in front of a model railroad, singing “I’ve been working on the railroad.” With the background that we know Buffet likes trains, including trains in China, and that Berkshire Hathaway not long back invested $20 billion in the Burlington Northern railroad over here, I wonder if he’s sending a signal that he may now be interested in getting financially involved somehow in the rails in China?

Stay tuned.

On our trip through China the past two weeks, we were driven in Chinese-made cars, as well as a Buick Regal. The Buicks are built in Shanghai, where they are  considered a luxury brand. We saw them in every city and town we visited, and drove in a black one for 3 days in Beijing. An interesting Chinese brand is built by BYD, formerly a Chinese battery company that makes a lot of the world’s cell phone batteries. A guy named Warren Buffet has invested $250 million in BYD, which company PR lore says stands for either Build Your Dreams, or Bring Your Dollars — you pick. Another car we rode in, and it is shown here, is built by FAW (First Automobile Works) HongQi, a state-owned company, and has the look, fit and finish of a Lexus. FAW also builds a luxury limousine, including the one the President of China rides in, that sells for a modest $1.2 million. At the car-building city of Changchun, we saw dealers for virtually every global brand and saw car carrying trucks, each with 16 new Chinese cars aboard, by the hundred. China is now the largest automobile market in the world, out selling the U.S. by 60%, and its cars are nearly ready for the U.S. market. Watch for their EVs (electric vehicles). Warren Buffet is.

January 2023

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