Today, Ray Dalio, the founder of the world's largest hedge fund Bridgewater, talked about his views on investing in China in an interview with Bloomberg TV, which is worth serious consideration by everyone!
Summarized by GPT-4, the key points are as follows👇:
Shrinking household wealth. Over the past four years, China's real estate and stock markets have declined, leading to the evaporation of the vast majority of household wealth, especially among the middle class. Residents are beginning to shift to holding cash, which is a relatively safe asset in the context of deflation.
Land finance. The decline in the real estate market has increased the debt pressure on the Chinese government. It is increasingly difficult to maintain through traditional land finance methods, and local governments are facing a shortage of funds. It will be difficult to escape the debt quagmire without structural reforms.
Property rights. Personal property rights are sacred and inviolable, but they have been questioned in China. This relates to investor confidence and the ability to effectively and long-term protect personal private property, which is an important challenge in economic structural adjustment. We have seen many cases of this recently, such as cross-regional law enforcement and a significant increase in non-tax revenue.
The glory of becoming rich. In the era of Deng Xiaoping, "It doesn't matter if a cat is black or white, as long as it catches mice, it's a good cat." "Let some people get rich first." This kind of thinking is fading away. Concerns about the deterioration of the entrepreneurial environment and policy uncertainty have become stumbling blocks for entrepreneurship. Is the concept of "the glory of becoming rich" still applicable?
Government-guided technological innovation. In the video, Dalio affirmed China's advantages in technological innovation, but noted that it is not open, with most of it being government-guided. Under this circumstance, the sustainability of enterprise innovation and vitality is being questioned.
Whether to continue investing in China. Dalio believes that any economy has its cycles, with highs and lows. He will continue to invest in China, but is reducing the proportion of investment, and believes that China is currently facing more serious economic challenges than Japan in the 1990s, and hopes that China can emerge from its economic structural reform.
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