At a Glance: Berkshire’s Buffett and Munger praise China’s prospects, discuss BNSF investment

At a Glance: Berkshire execs talk China, BNSF

Berkshire Hathaway’s top two executives, Warren Buffett and Charlie Munger, met with reporters Sunday, a day after the company’s annual shareholder meeting. They defended the company’s investment in Goldman Sachs and gave insights into the economic recovery.

Among other issues the two men discussed:

— America’s current low interest rates have consequences, Buffett said, but they have been the medicine the economy needed. “When cash is a terrible investment, it pushes up the value of every other investment,” he said.

Buffett said he trusts the Federal Reserve to decide when to raise interest rates.

“There’s nobody in the United States that I would rather have running the Fed than Ben Bernanke,” Buffett said.

— Berkshire’s $26.7 billion acquisition of Burlington Northern Santa Fe railroad is an indication that Buffett and Munger expect more products and raw materials to be shipped in the future. Munger pointed to two big advantages he says railroads have over trucks — greater efficiency and improved customer service.

— Buffett and Munger said Berkshire’s 2008 purchase of a 9.9 percent stake in Chinese car maker BYD Co., which also makes lithium batteries and solar panels, was a bet on BYD’s chairman and founder, Wang Chaun-fu, not on emerging technology.

Munger said Wang had successfully completed several feats that seemed impossible as he built BYD, including taking one-third of the lithium battery market away from Japanese manufacturers. So it made sense to invest in Wang and the systems he set up.

— Both Buffett and Munger predicted that China will enjoy a great deal of economic success in the years ahead.

“You’ve got well over a billion people who are just beginning to realize their potential,” Buffett said.

Munger said China’s system of one political party combined with modern capitalistic economic policies is peculiar, but it is working well partly because pragmatic people, often with an engineering background, keep rising to top leadership positions in China.

“China is developing a weird system of its own and it’s working,” he said.