Hedge-fund guru Ray Dalio advised savvy investors to bet on “both horses in the race” amid rising trade tensions between the U.S. and China.
Dalio argued that investors still have a historic opportunity to buy into China as it opens up its markets to foreign investments, CNBC explained.
“Would you have not wanted to invest with the Dutch in the Dutch empire? Would you have not wanted to invest in the industrial revolution and the British empire? Would you not want to invest in the United States and the United States empire? I think it’s comparable,” said the founder of the world’s largest hedge fund, Bridgewater Associates.
Dalio, in a video posted online, explained that despite the perceived risk of investing in China, going where growth can be found is the right thing to do.
“I believe China is a competitor of the United States or Chinese businesses are competitors of American businesses or other business around the world,” he said. “And that therefore you want to be, if you’re diversified, having bets on both horses in the race,” he said.
“I don’t think we’re going to go to classic war — I do think there is going to be a restructuring of the world order in terms of changes in supply chains, changes in who is making what technologies, important changes in some of those things,” Dalio said.
“I don’t think that is going to mean that there won’t be the evolution of China, the evolution of the United States,” he added.
With China increasingly opening its markets to foreign investors, Dalio cautioned that “it is better to be early than it is to be late.”
For his part, Trump dismissed fears of a protracted trade war with China on Tuesday despite a warning from Beijing that labeling it a currency manipulator would have severe consequences for the global financial order.
Trump, who announced last week he would slap a 10% tariff on a further $300 billion in Chinese imports starting on Sept. 1, tweeted that “massive amounts of money from China and other parts of the world” were pouring into the U.S. economy.
While Trump played down the prospect that the trade dispute could be drawn out, St. Louis Federal Reserve Bank President James Bullard said the U.S. central bank may be stuck with a volatile global trade environment for years.
“I think of trade regime uncertainty as simply being high in the current environment,” Bullard said at a National Economists Club luncheon. “I do not expect this uncertainty to dissipate in the quarters and years ahead.”
The U.S. Treasury Department said on Monday it had determined for the first time since 1994 that Beijing was manipulating its currency.
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