Billionaire investor Ray Dalio believes it is still difficult to invest in China at the moment because the Chinese government may be trying to structurally move China away from capitalism. The founder of Bridgewater Associates, one of the world’s largest hedge funds, said investors should take a nuanced and cautious approach to investing in developing regions undergoing systemic change. “They’ve had a debt crisis, they’ve had a capitalist crisis, so there’s something big going on. Are they… as pro-capitalist as we’ve always known? I don’t think so. I don’t think they’re the same,” Dalio said Tuesday in Greenwich. “There are structural changes happening that have to do with the government’s desire to maintain complete control, and that’s going to affect the economy,” he added at an economic forum in Greenwich, Conn. His comments come amid a recent resurgence of excitement about investing in China. The government has signaled a massive stimulus package to revive growth and avoid a deep recession in the world’s second-largest economy. These policy measures include lowering interest rates and reducing the amount of cash banks are required to hold, known as the reserve requirement ratio. But investors were disappointed on Tuesday when Chinese officials stopped short of announcing specific economic stimulus measures at a much-anticipated press conference. China’s market rally lost momentum, with the CSI 300 blue-chip index narrowing its gains to 5% after surging more than 10% early Tuesday. “I want to say please don’t look at it. [the Chinese markets] Hedge funds are rushing into struggling Chinese stocks, driven by hopes of more economic stimulus. Appaloosa Management’s David Tepper recently told CNBC that he is buying “everything” related to China thanks to recent government support. The prominent investor said that over the past few years, the Chinese government has introduced stricter regulations on the domestic technology sector and raised normal quota caps in an effort to curb the power of some countries. He even said. Mr. Dalio said in a wide-ranging interview that he does not expect any major rate cuts because the economy remains strong. There will be a significant reduction in interest rates. I think the current economy itself is generally in a relatively good balance.”
Investing in China is difficult because the Chinese government is no longer friendly to capitalism
