Ray Dalio, founder of Bridgewater Associates: China's economy faces more severe challenges than Japan in the 1990s!

Ray Dalio, founder of the world's largest hedge fund Bridgewater, talked about his views on investing in China in an interview with Bloomberg TV. It is worth everyone's serious attention! The summary is as follows:

Land finance.

The decline in the real estate market has led to increased debt pressure on the Chinese government, which has become difficult to maintain through traditional land finance means. Local governments are facing a shortage of funds, and it will be difficult to get out of the debt quagmire without structural reforms.

Property ownership.

Personal property ownership is sacred and inviolable, but this has been questioned in the Eastern giant. This is related to investor confidence and whether personal private property can be effectively and long-term protected. This is an important challenge in economic restructuring. This is more evident in the cases we have seen recently, such as cross-regional law enforcement and a sharp increase in non-tax revenue.

Getting rich is glorious.

In the DXP era, the idea that "it doesn't matter whether the cat is black or white, as long as it catches mice, it is a good cat" and "the rich will help the poor". Such ideas are disappearing. People's concerns about the deterioration of the entrepreneurial environment and policy uncertainty have become stumbling blocks for entrepreneurship. Is the idea that "getting rich is glorious" still applicable?

Technological innovation is guided by the government.

In the video, Dalio affirmed China's advantages in technological innovation, but it is not open. Most of them are mainly guided by the government. Under such circumstances, whether the soil for corporate innovation and vitality is sustainable is questioned.

Whether to continue investing in China.

Dalio believes that any economy has cycles, with highs and lows. He will continue to invest in China, but is reducing the proportion of investment, and it is not appropriate to let China become the dominant part of the investment portfolio. He also believes that China is currently facing more serious economic challenges than Japan in the 1990s, and he hopes that China can get out of it through structural reforms of the economy.