Founder of Bridgewater Associates Ray Dalio defended his decades investment in China and promised that he will not abandon the second largest economy in the world, even with all the problems he identified and the risks of a war with his own country, the USA.
“I had a wonderful 40-year relationship with the Chinese people and Chinese culture that led me to love them. For me, being involved with them and their markets go hand in hand and I wouldn’t want to be without either one,” the billionaire investor wrote in a LinkedIn post. “I don't step in when things are booming and step out when things are tough, because I'm neither 'a fair-weather friend' nor 'a fair-weather investor.'”
In an earlier post on March 27, the hedge fund titan discussed the many difficulties and challenges facing China and warned that Beijing it should reduce its debt and ease monetary policy or face “a lost decade”.
Dalio said China's problems are now manageable if “Chinese leaders do their jobs well, being smart and courageous.” He pointed to signs that economic leaders in Beijing are preparing to lead quantitative easing along with debt restructuring to engineer what he described as a “beautiful deleveraging.”
Last week, a line from a 172-page book that cited President Xi Jinping's past comments about the country's monetary tools prompted a group of stock and bond traders to argue that this could mean Beijing is considering quantitative easing, which involves a monetary authority buying the government of a country. titles. But the speculation was dismissed by most commentators, including economists at Goldman Sachs Group Inc.
For Dalio, Chinese policymakers are capable of “managing as well as dealing with political, geopolitical, natural and technological forces”. He has long cultivated relationships with Chinese officials and expressed admiration for some of Beijing's economic policies. and built business for his company in China. Dalio was among the prominent American business chiefs who shared the top table with Xi at an exclusive dinner in San Francisco last November.
At the same time, it has also been consistent in warning about the risk of conflict between the world's two largest economies. Last April, she wrote in a LinkedIn post that tensions could worsen as the US heads towards presidential elections in November 2024.
In Monday's post, he said he understands others when they are worried “if there is a US-China War it would be disastrous, especially if one were an American investor.” Dalio admitted that this is one of the issues he thinks about a lot when thinking about investing in most countries.
None of this, however, seems to stop Dalio from doing business with China.
“For me, the main question is not whether or not to invest in China, but rather how much to invest,” he wrote, adding that he sees China as one of his “15 or so good uncorrelated return streams” and “a central position from which I will vary based on my assessments of all the things I have mentioned.”