2010: What's the most important thing Buffett has learned from China?

CHINESE STUDENT: Good afternoon. My name is Shin Tse Chen (PH). I am a Chinese student from Kansas State University.

My question is, Mr. Buffett, what is the most important thing that you have learned from China? Thank you.

WARREN BUFFETT: Most important thing I’ve learned from China?

CHARLIE MUNGER: China, yeah.

WARREN BUFFETT: Yeah. What’s the most important thing you’ve learned from China, Charlie? (Laughter)

CHARLIE MUNGER: It has some very unusual people in BYD. (Laughter)

WARREN BUFFETT: I’ve learned —

CHARLIE MUNGER: No other lesson is as important as that one. (Laughter)

WARREN BUFFETT: I’ve learned they like Sprite better than Coke. Sprite outsells Coke in China by two-to-one. But they’re both growing dramatically.

I think China is an amazing economy. I mean, there is no question in my mind that, you know, the growth on a per-capita basis is going to be dramatic going forward. They’re just starting to exercise their potential.

When you think about it, in 1790, there were four million people in the United States, just under four million. There were 290 million in China in 1790. Just as smart, you know, just as hard working, resources of the land, the minerals, everything, its climate, very, very similar.

And for 170 years or so, relatively little progress was made in the standard of living for those people, like you say, who had all the native abilities that America had.

But, you know, in recent decades, the potential of the Chinese is being unleashed and it’s huge. And I think it’s very, very interesting to watch.

Charlie and I, and a group of some of the directors, are going over there at the end of September.

You know — and I was over there a couple of years ago. It’s a sight to behold.

But, in terms of specific lessons, they haven’t taught me how to eat Chinese food, I will say that. (Laughs)

CHARLIE MUNGER: I think I always knew that the Chinese people had an enormous potential for huge and rapid progress, because I could see that in all the Chinese-Americans that I dealt with.

And indeed, people came in here as Chinese “coolies” — in effect, slaves — and they rose so rapidly that it was a marvel.

So I always knew that China had a potential to be a huge credit to human civilization. But I think I underrated how fast it could happen.

China is setting a new record for advancement of civilization at a very rapid rate. It’s fun to watch.