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The simultaneous snuffing out of free-market innovation and democracy in China might make one think that now’s perhaps not the best time to invest in the world’s second-largest economy. That perhaps things are bit fraught at the moment; that discretion is the better part of valor and it might be a good idea to wait things out a bit. That it’s simply too risky at the moment.

Au contraire, sayeth Chairman Dalio. Investing in China is not the risky choice at the moment.

After studying rises and declines of reserve currency empires over the last 500 years, Dalio judged that “China is now evolving into that role”.

“To be absent (from) the Chinese capital markets is very risky,” Dalio said, adding “the fundamentals are undermining the U.S. dollar.”

But Ray, you say, might Jack Ma have a different opinion on the matter, albeit one he’s not likely to express publicly? No matter, responds the seasoned China-knower.

“Ant is a whole new concept in terms of banking, and almost could replace or threaten the banking system in China. And it hasn’t yet been properly established in terms of regulatory review and the like,” Dalio told the China Town Hall 2020.

“And it’s important to be clear that what we have in China is state capitalism. So the state is going to control those things,” said Dalio, describing Chinese regulators as “reasonable, caring, and highly-informed.”

Hmmm, you go on, I was with you right up to that last bit about the caring and reasonable Beijing bureaucrats, and that reminds me that I’ve never really heard you utter a bad word about the Chinese government, and what it's doing in Hong Kong certainly seems very bad to me, and I just wonder if you’re being objective given how potentially costly it could be if you were. Well, you’ll be surprised, Ray’s got an answer to that one, too.

“People have accused me of being biased, naive, and in some cases unpatriotic. I think I’m just being objective.”

Bridgewater’s Dalio supports Ant IPO suspension, bullish on China [Reuters]


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