My question is how do you see the current U.S./China internet companies’ valuation and the price disparity, given there have been many uncertainties such as geopolitical tensions, significant cost optimizations with leading U.S. tech firms, while China tech has been through all that already? Thank you.
Charlie, you want to?
Well, there’s been some tension in the economic relationship of United States and China. I think that tension has been wrongly created on both sides. I think we’re equally guilty of being stupid. If there’s one thing we should do, it’s get along with China. And we should have a lot of free trade with China in our mutual interest. (Applause)
And I just can’t imagine. It’s just so obvious. There’s so much safety and so much creativity that’s possible. Think of what Apple has done by engaging in a partnership with China as a big supplier. It’s been good for Apple and good for China. That’s the kind of business we ought to be doing with China. And more of it.
Everything that increases the tension between the two countries is stupid, stupid, stupid. It ought to be stopped on each side. And each side ought to respond to the other side’s stupidity with reciprocal kindness. That’s my view.
And it creates one enormous problem, of course, which is that you have the two superpowers of the world, and they know they have to get along with each other. Either one can destroy the other. And they’re going to be competitive with each other.
But part of it is, always in a game like that, is trying to judge how far you can push the other guy without them reacting wrong. And, you know, if either side is a bully in some ways, they can get away with it, to an extent, because the alternative would drive them both into destruction. But if they push it too far, they increase the probability that something really does go wrong. So, it’s one of those game theory dilemmas.
But you really need the leader of both countries. And you need the populace to understand, at least, the general situation in which these countries are going to operate over the next century. And know that some leader that promises too much can get you in a hell of a lot of trouble.
And, you know, you’ve got one kind of a system that gets its leader one way. They’ve got another system that gets its leader another way. And keeping either side from trying to play the game too hard, and thinking the other side will go along, you know, it’s like playing chicken, you know, and driving toward a cliff.
So, if you’ve got any diplomacy skills, persuasive skills, or anything like that, you really want people that will convince the other country, as well as his own or her own country, that, “This is what we’re engaged in. We’ve got to do it right. We won’t give away the store, but we won’t try and take the whole store, either."
And we’re just at the beginning of this, unfortunately. I mean, we learned what the situation was. It used to be the Soviet. And mutually assured destruction was our policy then. And that kept a lot of things from happening, but it also came with a very, very, very close call with Cuba.
You know, these are different games that existed hundreds of years ago. Britain might rule and seize France or Spain, but now you’re playing with a game that you can’t really make a huge mistake in.
And I think that should be — the better that’s understood in both countries, the more the leaders feel that their citizenry does understand that, the better off we’ll be. And that a lot of demography, or a lot of inflammatory speaking, but a lot of authoritarian action, I mean, it all carries its dangers. And the world has stumbled through the years post 1945 with a lot of close calls in the nuclear arena. And now we’ve got pandemics. And we’ve got cyber, and a whole bunch of other things. So, we’ve got more tools of destruction than the world’s ever had.
And it’s imperative that China and the United States both understand what the game is and understand that you can’t push too hard. But both places are going to be competitive. And both can prosper. That what's really is. That’s the vision that is out there, that China will have a more wonderful country, the United States will have a more wonderful country. And the two are not [incompatible]. They’re almost imperative in terms of what’s going to happen in the next 100 years or so.
And I think that the leaders of both countries have got an important job in having that understood, and not to do inflammatory things. And we’ll see whether the luck that has taken us from 1945 to present holds out. And I think we can affect, to some extent, that luck. And with that cheery message, we will hand it to Becky.
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One short takeaway from Warren Buffett and Charlie Munger's comments is the importance of maintaining a positive and cooperative relationship between the United States and China. They emphasize the need for free trade, reciprocal kindness, and understanding between the two countries, highlighting the potential for mutual benefit and prosperity.