Ray Dalio says none of China's new leadership team appear to be 'extremists'

BEIJING — American billionaire Ray Dalio said portion he's acold little acquainted with China's caller enactment squad than anterior officials, helium expects worries astir their aboriginal policies are overdone.

That's according to a Nov. 16 station connected LinkedIn that covered his outlook for China's system and policy.

Here are the highlights:

"I privation to stress that nary of the caller radical look to beryllium extremists," Dalio said. "How these argumentation makers volition equilibrium the trade-offs and modulate is present chartless and astir apt imagined to beryllium much unsafe than immoderate they volition really do."

In October, the ruling Communist Party of China paved the mode for President Xi Jinping to instrumentality connected an unprecedented 3rd term, portion packing the halfway enactment squad with his loyalists.

"The radical being added are loyal strongmen who look to beryllium susceptible and person demonstrated way records of being consenting to bash the unpopular things," Dalio said.

He said he's been told that Li Qiang — who is expected to go the adjacent premier — "is precise susceptible and pro-business, but I don't cognize him personally truthful I don't consciousness assured capable to accidental thing invaluable astir what helium is similar oregon what helium wants."

"I americium told that He Lifeng volition apt beryllium Liu He's replacement and is apt to beryllium little austere, arsenic his way grounds is successful gathering infrastructure financed by debt," Dalio said.

He Lifeng presently heads the economical readying agency, the National Development and Reform Commission. Liu He, a vice premier, has led commercialized talks with the U.S., portion heading the fiscal stableness committee.

Dalio said the enactment changes mean astir of the radical helium knew who were "reformist-globalists" are being replaced. He noted helium hasn't visited China since the pandemic began.

"When the Xi authorities archetypal came to power, I personally knew astir of those who ran the system nether Xi good capable to cognize what they wanted and what they were like," Dalio said.

The billionaire stepped down this twelvemonth arsenic co-chief concern officer from the hedge money helium founded, Bridgewater Associates. The steadfast has a subsidiary successful China.

In his station this week, Dalio said his observations drew upon 38 years of "intimate contacts" with radical successful China and his probe of the country's past going backmost to the Qin Dynasty astir 2,200 years ago.

Dalio warned that the anticipation of struggle with China volition beryllium an overhang for markets and economical enactment successful coming years, adjacent if warfare ne'er really breaks out.

"I person heard that successful a caller Republican-controlled House determination is immoderate anticipation determination volition beryllium a measure passed supporting the independency of Taiwan, which would beryllium for the Chinese tantamount to a declaration of warfare and would precise apt pb to immoderate benignant of subject struggle with China," Dalio said.

"Obviously the world of [war] would beryllium disastrous," helium said. "The bully happening is that sensible people, who are inactive astir radical successful power, recognize that this would beryllium terrible."

This week, Xi and U.S. President Joe Biden met successful idiosyncratic for the archetypal time since Biden took office. Many analysts saw the gathering arsenic affirmative for the bilateral relationship, which has grown progressively strained successful caller years.

China's existent property indebtedness problems and their spillover "into the bones of the economy" is 1 of the biggest challenges for the country, Dalio said, noting that existent property accounts for astir a 4th of the system and 70% of wealth.

He expects China tin grip the situation, but it volition instrumentality astatine slightest 2 oregon 3 years. "Even then, it volition permission immoderate scars, which volition apt beryllium much bully than atrocious successful the agelong tally due to the fact that the lessons volition stick," helium said.

Dalio besides said conscionable removing China's stringent Covid controls won't needfully marque the system stronger close away.

"Because the aged radical are susceptible and not protected and due to the fact that the aesculapian strategy is not prepared to adequately grip tons of aged radical with COVID, this is not an casual occupation to solve, though it tin beryllium handled successful a much targeted way, which is successful the works," helium said.