June 25 (Bloomberg) -- Warren Buffett said that China’s growth will outstrip the U.S.’s and that Bill Gates’s charity, to which he pledged most of his fortune, is best able to put his money to good use, according to Zhao Danyang, the Chinese hedge- fund manager who paid more than $2.11 million to lunch with him.

Over a 3 1/2-hour meal of steak and seafood in Manhattan that began at noon yesterday, the chairman of Berkshire Hathaway Inc. told Zhao that the general manager of Hong Kong-based Pureheart Asset Management Co. is lucky to be living in an era of Chinese ascendancy, comparing it with the benefits he gleaned from the U.S.’s strength in the past few decades. Buffett, 78, said he’s bullish on China’s future, though the U.S. wouldn’t fare poorly either despite slower growth, Zhao said.

Buffett’s assistant, Carrie Kizer, didn’t immediately answer phone and e-mail messages seeking to verify the comments.

“What I gained from that meeting was immeasurable,” said Zhao in a phone interview. He calls the “Oracle of Omaha” his teacher and credits Buffett’s inspiration with his fund’s 600 percent return over the past six years.

Zhao, 36, placed the winning bid for the charity lunch last year and brought seven of his friends and relatives to yesterday’s meeting at Smith & Wollensky’s steakhouse, said Pureheart. Proceeds from the auction go to the Glide Foundation, a San Francisco-based charity, where Susan Buffett, Buffett’s late first wife, volunteered. Glide provides job training, medical care, counseling and other services for the homeless, the HIV-positive and victims of domestic violence.

Dollar Policy

Zhao said he went to the lunch to ask about the relevancy of former U.S. Federal Reserve Chairman Paul Volcker’s strong- dollar policy to today’s economy, Buffett’s view on commodities, the importance of corporate governance and monopoly to a company, and the role of central governments in stabilizing money supply.

Buffett once said he likes to invest in companies that operate monopolies. His funds held shares in PetroChina Co. and sold most of their stake in the nation’s biggest oil producer in October 2007 after they had risen more than sevenfold. In September, Buffett’s MidAmerican Energy Holdings Co. agreed to buy 9.9 percent of BYD Co., sending Hong Kong-listed shares in China’s biggest maker of rechargeable batteries soaring.

“Buffett has been through several economic cycles, so he’s the best person to talk about how to move forward from this credit crisis,” Zhao said.

‘Too Controversial’

He declined to repeat Buffett’s views on the dollar, saying the topic was “too controversial.” Volcker is widely credited with ending U.S. inflation in the early 1980s, raising the federal funds rate, a benchmark for interbank lending, to as high as 20 percent in 1981; he is now chairman of the Economic Recovery Advisory Board in the Obama administration.

As gifts, Zhao said he brought Buffett “traditional Chinese presents”: a bottle of Maotai, a popular Chinese liquor of about 35 percent alcohol that’s distilled from fermented sorghum, and some e-gelatin, used in Chinese medicine to promote the growth of red-blood cells.

They didn’t discuss investments at the luncheon table, though Zhao said he mentioned Wumart Stores Inc., Beijing’s largest supermarket chain, in which his fund is a shareholder. Pureheart Asset Management Co. owns 12.6 percent of the Hong Kong-listed company as of March 30, stock-exchange filings show.

Maximize Returns

Buffett said that after decades of helping lawyers and doctors maximize returns on their money, he felt the Bill & Melinda Gates Foundation was best able to optimize the use of his own money and bring about social change, according to Zhao.

In 2006, Buffett had pledged to give the bulk of his fortune to the Seattle-based Gates Foundation, which awards grants primarily to fund programs on education and global health. According to Forbes’s 2008 ranking, Buffett is the world’s richest man, worth $62 billion. The Gates Foundation had $27.5 billion in asset-trust endowment as of April 1.

Zhao is a native of China’s northern province of Shaanxi and graduated from Xiamen University in 1994 with a degree in systems engineering. He said Pureheart now has about HK$1 billion ($129 million) in funds under management.

Bidding for lunch next year with Buffett is in its fifth day and closes tomorrow on the Internet auction site. The current auction had attracted 64 bids as of 2 a.m. New York time and is at $300,100.

To contact the reporter on the story: Le-Min Lim in Hong Kong at lmlim@bloomberg.net

Last Updated: June 25, 2009 04:36 EDT