Over the last 40 years, China’s rapid economic expansion has altered the world’s geopolitical and economic landscape. Bridgewater’s Founder, Co-CIO and co-Chairman Ray Dalio joins Bridgewater's Senior Portfolio Strategist Jim Haskel to discuss the historical arc of this growth and why the portfolio characteristics of China’s markets are attractive and diversifying despite escalating global tensions.
Ray Dalio has advised investors to bet on China or risk missing out on their piece of the next global empire, days after the Trump administration officially labeled the world's second-largest economy a "currency manipulator" and announced tariffs on virtually all Chinese goods.
"Would you not have wanted to invest 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?"
'I think [China is] comparable," Dalio said, highlighting the four-fold growth in Chinese equity markets and the seven-fold growth in its bond markets over the past decade.
He views China as a competitor to the US and recommends investors play both sides.
"You want to be, if you're diversified, having bets on both horses in the race."
"If there's no big war, I'm bullish on China, and if there's a big war, I'm bearish on both the US and China," he said.
Dalio closed by highlighting "three big forces" for investors to watch:
the point where there's an economic downturn and central banks can't cut interest rates further and their asset purchases cease being effective,
when rising inequality sparks "extreme" conflicts between the rich and poor,
and the battle for global dominion between the rising power of China and the incumbent world power, the US.
Watch the full interview below. To skip to specific sections in the video please find chapters marked below:
The US-China Conflict - 4:38
Investing in China - 11:30
Public and Private Markets in China - 20:32
Portfolio Characteristics of Chinese Markets - 24:47
Looking Ahead - 27:53