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China is placing faith in patient capital, rather than short-term trades, to shape its future growth trajectory, a strategy that gained even more prominence following Warren Buffett's recent departure from Berkshire Hathaway after six decades. As investors closely monitor this week's US-China leadership summit, speculation arises whether Beijing's interpretation of Buffett's value-investing legacy could aid Wall Street in regaining confidence in Chinese assets.

Tommy Ong, managing director of Hong Kong-based T.O. & Associates Consultancy, posits that Berkshire's long-term investment philosophy aligns with China's economic outlook. Following Buffett's retirement plans, Wu Qing, chairman of the China Securities Regulatory Commission, echoed the sentiment, stating that the billionaire's principles of long-term value investing, rational investment, and rewarding investors are timeless.

Regulators are also reorienting the country's approximately US$4.5 trillion mutual fund industry, redirecting incentives from speculative short-term trades to a focus on longer holding periods. Bruno S. Sergi, a Harvard University instructor specializing in development economics and emerging markets, asserts that China is not merely preserving this as an old strategy, but has made it a national financial imperative.

Policymakers aim to encourage investors to support sectors like advanced manufacturing, electric vehicles, and industrial upgrading over quick trades. Berkshire's exit from BYD last year, which saw an initial US$230 million investment grow to over 20 times its original value, serves as a testament to this approach. However, Sergi also highlights how Berkshire unexpectedly reduced its stake in Taiwan Semiconductor Manufacturing Company (TSMC) mere months after acquiring a significant position in late 2022, and subsequently began augmenting its holdings in Japanese trading houses.

This maneuver was primarily attributed to caution regarding geopolitical risks. In April 2023, Buffett had already acknowledged geopolitical tensions as a factor in Berkshire's decision to divest from TSMC. This high-profile departure further fueled concerns among foreign investors about the political risks associated with scant new listing opportunities.

Horizon Financial's chief economist, Kevin Chen Kaifeng, remarked that despite these apprehensions, the political risks are becoming a more significant deterrent for foreign institutions. The situation is further exacerbated by the scarcity of new Chinese companies listed in the US, with only 50 to 60 companies in each of 2024 and 2025 compared to a mere two in 2023.

Despite these challenges, some significant players, such as David Tepper of Appaloosa Management and Stanley Druckenmiller of Duquesne Family Office, are still increasing their stakes in Chinese firms. Appaloosa increased its position in Baidu, a Chinese tech giant, to around US$148 million, while Duquesne returned to Chinese stocks for the first time in over two years, investing US$10 million in BYD.

Attention is currently centered on President Xi Jinping's three-day state visit, which is expected to commence on Wednesday. Key topics for discussion may include tariffs, rare earth supply chains, and AI development controls. Analysts are somewhat divided on the summit's potential impact, with some believing it could momentarily boost sentiment, while others argue that substantive policy changes are required to catalyze capital allocation for an extended period.

Sergi maintains that until US investors witness a substantial stimulus package from China, the broader appetite for Chinese assets on Wall Street is unlikely to return.