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Hasn't Ray Dalio been advocating investing in China for a couple of years now? His thesis is that the US is a world power on the decline and China will soon ri

Hasn't Ray Dalio been advocating investing in China for a couple of years now? His thesis is that the US is a world power on the decline and China will soon rise to take its place. I wonder how that worked out for him and his fund?

Quarrelsome 5y ago
> His thesis is that the US is a world power on the decline and China will soon rise to take its place. I feel like someone has mistaken 100 years for 10 years.
klodolph 5y ago
Bridgewater suffered massive losses and laid off a ton of staff a year or two ago. The losses were something like $12 billion in 2020. If you are hiring in the northeast, you've probably run into ex-Bridgewater employees.
boringg 5y ago
In the long run China has a lot of power here. This might be a correction in how they set up their economy but I don't think anyone doubts that China is an economic superpower. The thing is investing in China a foreigner is a complete dice roll where you have no real power and no visibility into what you are investing in.
- JumpCrisscross 5y ago
  > I don't think anyone doubts that China is an economic superpower They are, but the foundation is rickety. Xi is a dictator. That increases the odds of catastrophic failure. Were an economic collapse to become protracted, it's not hard to imagine separatist movements and competing power sectors turning to violence as a political tool.
  - whimsicalism 5y ago
    People have been talking about the "rickety foundation" of China for decades. I'm sure when they have an economic downturn sometime in the next two decades, those people will all come out to crow about how they had been right all along. To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West.
    - JumpCrisscross 5y ago
      > People have been talking about the "rickety foundation" of China for decades Economically, sure. (Those always struck me as sour grapes or a fundamental misunderstanding of how debt works in a centrally-planned economy.) Politically, however, the CCP had intraparty competition that avoided the sort of rot that felled the Soviets. It also kept the Party thinking long term. Hong Kong and Taiwan are good examples of Xi's impatience. Absent intervention, Hong Kong would have uncontroversially folded into China in 2047. The combination of China's military and economic prowess, then, could have encouraged peaceful unification with Taiwan. But Xi was impatient. He wanted it in his lifetime. So he rushed Hong Kong and screwed up not only Taiwan, but relations with all his neighbors, from the Philippines to India. Dictators like to style themselves as monarchs. But monarchy has a continuity that dictatorships don't. That makes them more impatient and more unstable, particularly at the transfer of power.
      - boringg 5y ago
        Agreed - the fundamental political structure is flawed. However we don't know how long it will take for that structure to break or change. Currently Xi is making some moves (with the historical resolution) to retain power indefinitely. There are also economic problems in China that Evergrande has brought to the attention - the wild speculation in real estate that is concerning for the party to maintain control. As well with the tech crackdown recently. In broad brushes it points to some problems over there (manageable probably - but risks for control of the party).
      - rgbrenner 5y ago
        In 8 years, China is not going to rot to the degree you're referring to. So Xi made a mistake and maybe cost China Taiwan... but in no way does China's future depend on Taiwan. He has to make a lot more mistakes or be in power much longer. Right now, his tenure could be compared to a bad US president... we survive that sort of damage fine (it's not good, but the country isnt going to fail).
  - puranjay 5y ago
    > Xi is a dictator. Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known.
    - JumpCrisscross 5y ago
      > Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known I'm not blaming anyone for the government model. Just staying that it comes with known risks, and one of those is economic depressions and power transitions becoming violent. The stakes are too high.
  - rgbrenner 5y ago
    That is hard to imagine. We have to believe that the CCP wouldn't crack down on separatists, and they wouldn't elect a new leader. China may have eliminated the term limit (of 2x5 years), but Xi has only been president for 8 years. They still have a fresh memory of transferring power. Certainly the longer he's president, the scenario you outline becomes more likely... but not in 8 years.
    - ericmay 5y ago
      Isn’t Xi Jinping announcing his lifetime rule today or this week?
ulber 5y ago
>His thesis is that the US is a world power on the decline and China will soon rise to take its place. Something I've found interesting about these kinds of theses (although I'm sure there's more to his) is that just believing that a company/country/whatever is going to be successful doesn't make it a good investment. It's all about the pricing of the asset and ultimately, for assets priced by a market mechanism, about what other people think. So a thesis for investing more in China could be "US is in decline and China will take its place faster/more fully than the market thinks." Of course even if you don't have any special knowledge about China's future, the default position should still be to invest a part of your portfolio according to it's market weight, which in the FTSE All-World Index [1] is 3.9% currently. [1]: https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingleIssue?issueName=AWORLDS&IsManual=false https://research.ftserussell.com/Analytics/Factsheets/Home/D...
- gizmondo 5y ago
  I don't think this criticism applies here. The thesis is clearly contrarian, as the market prices US assets lavishly and Chinese dirt cheap. The reader can be assumed to know that.

Quarrelsome 5y ago

> His thesis is that the US is a world power on the decline and China will soon rise to take its place. I feel like someone has mistaken 100 years for 10 years.

klodolph 5y ago

Bridgewater suffered massive losses and laid off a ton of staff a year or two ago. The losses were something like $12 billion in 2020. If you are hiring in the northeast, you've probably run into ex-Bridgewater employees.

boringg 5y ago

In the long run China has a lot of power here. This might be a correction in how they set up their economy but I don't think anyone doubts that China is an economic superpower. The thing is investing in China a foreigner is a complete dice roll where you have no real power and no visibility into what you are investing in.

JumpCrisscross 5y ago
> I don't think anyone doubts that China is an economic superpower They are, but the foundation is rickety. Xi is a dictator. That increases the odds of catastrophic failure. Were an economic collapse to become protracted, it's not hard to imagine separatist movements and competing power sectors turning to violence as a political tool.
- whimsicalism 5y ago
  People have been talking about the "rickety foundation" of China for decades. I'm sure when they have an economic downturn sometime in the next two decades, those people will all come out to crow about how they had been right all along. To me, they seem to be building on top of a more modern infrastructure base and do not have the super-prevalent NIMBY problems that exist in the West.
  - JumpCrisscross 5y ago
    > People have been talking about the "rickety foundation" of China for decades Economically, sure. (Those always struck me as sour grapes or a fundamental misunderstanding of how debt works in a centrally-planned economy.) Politically, however, the CCP had intraparty competition that avoided the sort of rot that felled the Soviets. It also kept the Party thinking long term. Hong Kong and Taiwan are good examples of Xi's impatience. Absent intervention, Hong Kong would have uncontroversially folded into China in 2047. The combination of China's military and economic prowess, then, could have encouraged peaceful unification with Taiwan. But Xi was impatient. He wanted it in his lifetime. So he rushed Hong Kong and screwed up not only Taiwan, but relations with all his neighbors, from the Philippines to India. Dictators like to style themselves as monarchs. But monarchy has a continuity that dictatorships don't. That makes them more impatient and more unstable, particularly at the transfer of power.
    - boringg 5y ago
      Agreed - the fundamental political structure is flawed. However we don't know how long it will take for that structure to break or change. Currently Xi is making some moves (with the historical resolution) to retain power indefinitely. There are also economic problems in China that Evergrande has brought to the attention - the wild speculation in real estate that is concerning for the party to maintain control. As well with the tech crackdown recently. In broad brushes it points to some problems over there (manageable probably - but risks for control of the party).
    - rgbrenner 5y ago
      In 8 years, China is not going to rot to the degree you're referring to. So Xi made a mistake and maybe cost China Taiwan... but in no way does China's future depend on Taiwan. He has to make a lot more mistakes or be in power much longer. Right now, his tenure could be compared to a bad US president... we survive that sort of damage fine (it's not good, but the country isnt going to fail).
- puranjay 5y ago
  > Xi is a dictator. Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known.
  - JumpCrisscross 5y ago
    > Countries that have never known democracy, or received democracy without ever truly fighting for it, don't really care much whether you're a dictator or not a dictator- that's all that they've known I'm not blaming anyone for the government model. Just staying that it comes with known risks, and one of those is economic depressions and power transitions becoming violent. The stakes are too high.
- rgbrenner 5y ago
  That is hard to imagine. We have to believe that the CCP wouldn't crack down on separatists, and they wouldn't elect a new leader. China may have eliminated the term limit (of 2x5 years), but Xi has only been president for 8 years. They still have a fresh memory of transferring power. Certainly the longer he's president, the scenario you outline becomes more likely... but not in 8 years.
  - ericmay 5y ago
    Isn’t Xi Jinping announcing his lifetime rule today or this week?

ulber 5y ago

>His thesis is that the US is a world power on the decline and China will soon rise to take its place. Something I've found interesting about these kinds of theses (although I'm sure there's more to his) is that just believing that a company/country/whatever is going to be successful doesn't make it a good investment. It's all about the pricing of the asset and ultimately, for assets priced by a market mechanism, about what other people think. So a thesis for investing more in China could be "US is in decline and China will take its place faster/more fully than the market thinks." Of course even if you don't have any special knowledge about China's future, the default position should still be to invest a part of your portfolio according to it's market weight, which in the FTSE All-World Index [1] is 3.9% currently. [1]: https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingleIssue?issueName=AWORLDS&IsManual=false https://research.ftserussell.com/Analytics/Factsheets/Home/D...

gizmondo 5y ago
I don't think this criticism applies here. The thesis is clearly contrarian, as the market prices US assets lavishly and Chinese dirt cheap. The reader can be assumed to know that.