China is promoting long-term, value-focused investing as it seeks to reshape its roughly US$4.5 trillion mutual fund industry and attract foreign investors, with the approach gaining renewed attention following Warren Buffett’s departure from Berkshire Hathaway after six decades at the helm.
Chinese regulators are shifting incentives away from short-term speculation and towards longer holding periods. Wu Qing, chairman of the China Securities Regulatory Commission, said after Buffett announced his retirement plans last year that the investor’s emphasis on “long-term value investing, rational investment, and striving to reward investors will never retire”.
Tommy Ong, managing director of Hong Kong-based T.O. & Associates Consultancy, said Berkshire’s long-term investment philosophy was compatible with China’s economic approach. Bruno S. Sergi, an instructor at Harvard University specialising in development economics and emerging markets, said China was treating long-term value investing not simply as an investment strategy but as a broader financial objective. Policymakers, he said, wanted investors to support areas including advanced manufacturing, electric vehicles and industrial upgrading rather than pursue quick trades.
Berkshire’s own experience in China has provided a prominent example of the opportunities and risks involved. The company sold its remaining stake in electric vehicle maker BYD last year, ending a 17-year investment that transformed an initial commitment of about US$230 million into more than 20 times its original value.
Sergi also pointed to Berkshire’s decision to sharply reduce its holding in Taiwan Semiconductor Manufacturing Company only months after buying a multibillion-dollar stake in late 2022, followed by increased investment in Japanese trading houses. He characterised the move as broader caution about geopolitical exposure rather than a verdict on China alone. Buffett was widely quoted in April 2023 as saying geopolitical tensions had been “a consideration” in Berkshire’s decision to sell TSMC shares.
The high-profile exits have added to caution among foreign institutions already weighing political risks against a shrinking pipeline of Chinese companies listing in the United States. Kevin Chen Kaifeng, chief economist at Horizon Financial in New York, said investors were “more cautious now, due to the political-risk consideration”.
Chen said Chinese companies had completed roughly 50 to 60 US listings in each of 2024 and 2025, compared with only two so far this year, leaving investors with “very little to choose from”. Nevertheless, some major US investors have continued buying Chinese shares. Appaloosa Management’s David Tepper nearly doubled his stake in Baidu to about US$148 million last quarter, according to regulatory filings, while billionaire investor Stanley Druckenmiller’s Duquesne Family Office returned to Chinese stocks after more than two years with a US$10 million position in Baidu.
Foreign holdings of yuan-denominated Chinese stocks tracked under the Qualified Foreign Institutional Investors scheme rose 87 per cent to about US$40.6 billion last quarter, according to data provider Wind.
Attention is now turning to Chinese President Xi Jinping’s three-day state visit to the United States, which begins on Wednesday, with tariffs, rare-earth supply chains and artificial intelligence development controls expected to be among the issues discussed.
Some analysts expect any immediate impact from the summit to be more visible in investor sentiment than in substantive policy. “A summit can improve sentiment for a quarter; only policy clarity can improve capital allocation for a decade,” Sergi said.
Ong said a lack of unexpected improvements in China’s near-term economic performance and policy support remained a barrier to US investors. Broader appetite, he said, would return only “if US investors see a large stimulus package from China”.
