Interview: Nebraska governor eyes long-term value investing approach for U.S.-China ties

As someone who grew up in the city of Omaha in the midwest, Nebraska governor Pete Ricketts believes the United States and China could learn from the city's legendary investor Warren Buffett, taking a long-term value investing approach to manage their ties.

"The Sage of Omaha has done wonders for the investing community by really helping people think through that idea of value investing for the long term," Ricketts said of Berkshire Hathaway's chairman and CEO Buffett on the sidelines of the company's annual shareholder meeting held at the weekend in Omaha, Nebraska.

Over the past six decades, the 86-year-old Buffett has transformed Berkshire from a struggling textile business into a financial powerhouse with insurance, energy, transportation and manufacturing units through his famous long-term value investing strategy.

His shrewd stock picks and acquisitions have contributed to the steadily rising earnings of the company, a U.S. Multinational conglomerate headquartered in Omaha, and earned him the nickname of the "Sage of Omaha", or the "Oracle of Omaha".

"I think that's why so many Chinese investors appreciate Mr. Buffett, because he thinks about the long term the same way the Chinese people think about long term," said Ricketts, who has visited China twice since becoming Nebraska state governor in January 2015

"That's exactly how we should be thinking" about relations between the United States and China as well, he said.

"Certainly we may have challenges short term, but we also have to remember how important the relationship between the United States and China is and that is for the long-term good of all the nations of the earth that we have good relationships," Ricketts said in an exclusive interview with Xinhua.

"We think about that long-term relationship because both countries are going to be here for a long time," he said.

MUTUALLY BENEFICIAL TRADE RELATIONSHIP

Ricketts said the meeting between U.S. President Donald Trump and Chinese President Xi Jinping last month in the U.S. seaside resort of Mar-a-Lago in Florida "went very well", noting "the fact that two leaders got the chance to meet personally is good" for both countries and the entire world.

At the meeting, the two leaders agreed to create a four-pronged high-level dialogue mechanism to deal with major issues on security, economic relations, cyber security and law enforcement, and people-to-people exchanges.

The two sides also agreed on a 100-day plan to boost economic cooperation and address trade concerns, which likely includes expanding U.S. beef exports to China, according to analysts.

"Beef is our number one export, we're the number one state that exports the most beef around the world, and we certainly would appreciate the opportunity to be able to export what we have here in Nebraska to China," Ricketts said.

Iowa Governor Terry Branstad, an old friend of the Chinese people and the longest-serving U.S. governor, has been tapped to be the next U.S. ambassador to China, something Ricketts believes is "a very positive sign" that shows Trump's commitment to the relationship with China.

"Obviously Governor Branstad and President Xi Jinping have known each other for a long time ...I know he'll do a great job of representing agriculture and our relationship with China," he said.

While the United States and China may have differences with regard to trade policies, Ricketts urged the two countries to foster mutually beneficial trade ties, "so that both countries can continue to see the prosperity that's been created by our trade relationship," he said.

NEBRASKA TO STRENGTHEN TIES WITH CHINA

Recalling his last trade mission to China in November 2016, Ricketts believes "there's tremendous opportunity for both Nebraskans and Chinese in developing that relationship further."

"China is our second biggest trading partner outside of North America and we exported over 1.2 billion (U.S.) dollars to China last year," he said, adding the rising standards of living in China "creates not only a great future for China but a huge opportunity for states like Nebraska to meet the needs of the Chinese people."

During the trip, Nebraska and China's Shaanxi Province signed an agreement to cement a sister state-province tie and launched a demonstration farm, known as Nebraska (Yangling) Agricultural Sci-tech Park in Shaanxi Province, to showcase farm equipment and techniques used in Nebraska.

"It"s a cooperation with the state of Nebraska, the University of Nebraska, and Northwest Agricultural and Forestry University to really showcase the technology that we're using in Nebraska that could help Chinese producers," Ricketts said, eyeing irrigation as useful technology for Chinese farmland.

"Nebraska is actually the largest irrigated state in the United States with over 8 million acres (3.2 million hectares) of irrigated farmland and that is an opportunity for China as well to look at using that technology to be able to expand the number of acres that the Chinese can irrigate," he said.

"So it's about 80 hectares of land in Shaanxi Province that we use to really strengthen that relationship between Nebraska and China," Ricketts said of the demonstration farm.

The U.S. governor also welcomed Chinese companies to invest in the state's top two industries, agriculture and manufacturing, listing central location, great workforce, business-friendly regulatory environment, and competitive taxes in Nebraska as advantages.

"Jiangsu World Group has invested in the Worldlawn Power Equipment in Nebraska to make lawn mowers, but they also make agricultural equipment in China, so that's a great example of a Chinese company that has really found that synergy between what they do in Asia and what they can do in North America," he said.

The Chinese logistics firm Easyway International of Shaanxi province also chose to locate its North American headquarters in Gretna, Nebraska, he added.

"Nebraska is centrally located and so you can get within anywhere in the continental United States within two days of trucking. So it's a key location if you're in logistics, we've got a great transportation infrastructure already for both roads and rails," he said.

Drawing from his previous business experience, Ricketts said his state government really focuses on "being customer-oriented, more effective and more efficient" to be able to help companies.

Meanwhile, there's a lot of common characteristics between the culture here in Nebraska and Chinese culture concerning the emphasis on family, education, working hard, being patient, and thinking long term, said Ricketts.

"Those are all characteristics of both the Chinese people and Nebraskans," he said, noting that's why he believes the state's relationship with China will grow. Ricketts adds that he will certainly be returning to China again some time in the future. Endit