Even Ray Dalio Knows China’s Economy Is in Trouble

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Billionaire Bridgewater founder Ray Dalio is one of the biggest China bulls anywhere. However, despite knowing that China’s economy is cratering, he hasn’t given up on the place. But as Dalio told Bloomberg in Singapore this week, “there are real issues” with China’s $17 trillion economy amid a deepening slowdown.

“You have an environment in China that is changing and becoming a more difficult environment,” in recent years, Dalio said. He pointed out that property and stock prices are plunging. In fact, Dalio thinks Xi Jinping’s economy may confront a “situation that’s more challenging than Japan in 1990.”

Bridgewater is not cutting and running. As Dalio qualified, “There’s a small percentage of our portfolio which is in China, and we’ll stay in China through this process.” In theory, he noted that China is still a “very attractively priced place” if the size of those bets and their structure are appropriate.

Xi relies on stimulus, but the Bank of China is exercising restraint this time around.

It all sounds like a house of cards similar to the US’s, but we’ll see.

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