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Bridgewater’s Ray Dalio says investors should still bet on China despite trade war
* Trade conflict ‘natural development’ between world’s biggest economies, founder of world’s biggest hedge fund says
* Not investing in China is ‘very risky’, Dalio says
Chad Bray
Published: 11:46am, 7 Aug, 2019
Investors should continue to bet on China and its future growth despite a trade war that has raged with the United States for more than a year, according to Ray Dalio, the founder of Bridgewater Associates, the world’s biggest hedge fund.
Dalio, who has been a long-time bull on China, said the conflict between the world’s two largest economies is a “natural development” as China has grown and expanded and is not dissimilar to conflicts with other rising powers in history.
“Think about it. Would you not wanted to have invested with the Dutch in the Dutch empire? Would you have not wanted to have invested in the industrial revolution and the British Empire? Would you have not wanted to have invested in the United States?,” Dalio said in a video posted on the company’s YouTube channel on Wednesday. “I think [China is] comparable. Would you have not wanted to have invested in those places?”
Bridgewater manages about US$160 billion for 350 of the world’s biggest institutional clients, including government and corporate pension funds, university endowments, sovereign wealth funds and charitable foundations.
The video was posted days after US President Donald Trump threatened to add 10 per cent tariffs on another US$300 billion of Chinese goods, adding tariffs to nearly all Chinese imports. The Trump administration also labelled China a currency manipulator after Beijing allowed the yuan to fall below the psychologically important level of 7 to the US dollar.
Trump has imposed tariffs on thousands of Chinese-made products as he tries to put pressure on Beijing to change decades of trade and industrial policy that have allowed it to become the world’s second biggest economy behind the US.
Dalio, who has travelled to China since 1984, said that China’s stock markets, by market capitalisation, have grown by a factor of four in the past decade and the bond markets have increased by a factor of seven.
“I also believe in diversification. I believe that China is a competitor of the United States,” Dalio said. “Chinese businesses will be competitors of American businesses and other businesses around the world. You want to be, if you’re diversified, having bets on both horses in the race.”
He said that there is a tendency among investors to shy away and “not to do the new things”, and the world’s major economies, including Europe and the US, all present their own risk, not just China.
“I think the real question is are we going to go to war. If we go to war, we are in a different world,” Dalio said. “I don’t think we’re going to go to ‘classic war’. I think there is going to be a restructuring of the world order in terms of changes in supply chains. There will be changes in who’s making what technologies, important changes in those sorts of things.”
Not investing in China and its future is “very risky” and it is better to be early than late in terms of investing, Dalio said.
More details in https://www.scmp.com/business/companies/...-bet-china
* Trade conflict ‘natural development’ between world’s biggest economies, founder of world’s biggest hedge fund says
* Not investing in China is ‘very risky’, Dalio says
Chad Bray
Published: 11:46am, 7 Aug, 2019
Investors should continue to bet on China and its future growth despite a trade war that has raged with the United States for more than a year, according to Ray Dalio, the founder of Bridgewater Associates, the world’s biggest hedge fund.
Dalio, who has been a long-time bull on China, said the conflict between the world’s two largest economies is a “natural development” as China has grown and expanded and is not dissimilar to conflicts with other rising powers in history.
“Think about it. Would you not wanted to have invested with the Dutch in the Dutch empire? Would you have not wanted to have invested in the industrial revolution and the British Empire? Would you have not wanted to have invested in the United States?,” Dalio said in a video posted on the company’s YouTube channel on Wednesday. “I think [China is] comparable. Would you have not wanted to have invested in those places?”
Bridgewater manages about US$160 billion for 350 of the world’s biggest institutional clients, including government and corporate pension funds, university endowments, sovereign wealth funds and charitable foundations.
The video was posted days after US President Donald Trump threatened to add 10 per cent tariffs on another US$300 billion of Chinese goods, adding tariffs to nearly all Chinese imports. The Trump administration also labelled China a currency manipulator after Beijing allowed the yuan to fall below the psychologically important level of 7 to the US dollar.
Trump has imposed tariffs on thousands of Chinese-made products as he tries to put pressure on Beijing to change decades of trade and industrial policy that have allowed it to become the world’s second biggest economy behind the US.
Dalio, who has travelled to China since 1984, said that China’s stock markets, by market capitalisation, have grown by a factor of four in the past decade and the bond markets have increased by a factor of seven.
“I also believe in diversification. I believe that China is a competitor of the United States,” Dalio said. “Chinese businesses will be competitors of American businesses and other businesses around the world. You want to be, if you’re diversified, having bets on both horses in the race.”
He said that there is a tendency among investors to shy away and “not to do the new things”, and the world’s major economies, including Europe and the US, all present their own risk, not just China.
“I think the real question is are we going to go to war. If we go to war, we are in a different world,” Dalio said. “I don’t think we’re going to go to ‘classic war’. I think there is going to be a restructuring of the world order in terms of changes in supply chains. There will be changes in who’s making what technologies, important changes in those sorts of things.”
Not investing in China and its future is “very risky” and it is better to be early than late in terms of investing, Dalio said.
More details in https://www.scmp.com/business/companies/...-bet-china
Specuvestor: Asset - Business - Structure.