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China economy

The US billionaire investor treated like a rock star in China … (clue: it’s not Warren Buffett)

PUBLISHED : Sunday, 04 March, 2018, 4:04pm
UPDATED : Sunday, 04 March, 2018, 4:03pm

US billionaire investor Ray Dalio has attracted massive publicity over the past week in China with a gala event in his name in Beijing, an interview with state television and lines from his latest book widely shared on social media.

The popularity of Dalio comes after four decades of links to China’s economy.

He first set foot on Chinese soil in 1984 when he was invited by the Chinese state conglomerate Citic, to teach China – then a relative economic Communist backwater eager to learn from market economies – how financial markets work.

In 1989, as a seven-member team was designing China’s stock market, he donated funds to the project to show his support as the nation opened up its economy to the rest of the world. Among the team was Wang Boming, now the editor-in-chief of financial magazine Caijing.

If you think stock market volatility is bad now, just wait for next year

The 68-year-old American billionaire, whose fund now manages about US$160 billion in assets, took to the stage like a rock star on Tuesday, addressing hundreds of Chinese financial professionals and researchers in a packed room at the Grand Hyatt Beijing. His speech was live-streamed on a number of Chinese media platforms.

The translated version of is book, Principles, now tops the bestseller list on JD.com and Dangdang.com, two Chinese online book sales websites.

China has about 100 million retail stock investors and many of them have suffered losses in the country’s volatile securities market, turning them into fans of investment gurus such as Warren Buffett and George Soros who have proved able to generate strong returns in the long term.

On Tuesday, Dalio did not give any stock picks, but talked about the broad principles that underpinned investing.

“The most important principle is that you have to think for yourself and have principles that work for you,” he said.

A group of China’s most renowned economists – including Zhu Min, a former deputy central bank governor, and Qian Yingyi, dean of the school of economics and management at Tsinghua University – showered praise on Dalio and his ideas.

Dalio, in turn, praised China’s efforts to cut debt levels and pledges to open up its markets to overseas firms, although the China unit of Bridgewater, Dalio’s investment management firm, was only allowed to register in Shanghai in 2016.

“My understanding is that the leadership is committed to financial market reforms and opening up to foreign investment,” he told the audience.

A ‘bad ending’ is coming for cryptocurrencies, warns Warren Buffett

In particular, Dalio praised Liu He, President Xi Jinping’s right-hand man as “capable” and able to solve problems, having already conducted “beautiful deleveraging” in China.

“When you look at the new economy in China, the entrepreneurship, the energy that exists here, the inventiveness, all of that, there’s a reason, in my opinion, to be very optimistic that this will be an effective deleveraging,” he said.

Dalio did not mention if he had met Wang Qishan – the political ally of Xi tipped to become vice-president later this month – during his trip. The two men have met several times before, The New York Times reported last year.

Most of the meetings between them were private, with the Chinese government reporting in 2011 that Wang, then a vice-premier, had discussed with Dalio the “global economic situation and European sovereign debt”.