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Bridgewater Associates Founder & Co-Chairman/Co-CIO Ray Dalio speaks last year. On Saturday, he reupped his favorable view of investing in China.
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Ray Dalio believes global markets face a “very special moment,” with China’s capital markets on the rise and the relative investment appeal of the U.S. fading.
The billionaire founder of Bridgewater Associates addressed the Caixin Summit on Saturday and largely echoed comments made last month, when he said he was staying ‘tactical’ on Chinese investments when many had fled.
In addition to capital markets opening, Dalio emphasized the relative attractiveness of yuan-denominated assets CNHUSD, +0.09% CNYUSD, and scope for strong demand as global investors have been underweight China.
The U.S. by contrast has reached the end of a long-term debt cycle when interest rates hit 0%, its wealth and income gaps are the largest since the 1930s and political polarization is the most extreme since 1900, he told the conference Saturday.
All told, these conditions make China a relatively competitive place to move capital, he said.
The yuan’s reserve status may still be lagging the dollar’s DXY, -0.26% dominance for now, but Dalio said he expects that can shift as China opens its financial markets to overseas participants.
About 60% of all domestic assets are now “accessible to” foreign investors, up from just 1% in 2015, he said. China’s capital markets have also gotten bigger and more liquid, now accounting for around 15% of the world’s equity market in terms of market value.
China will “inevitably catch up,” by virtue of its share of world trade and the size of its economy, Dalio said.
