Billionaire Investor Ray Dalio Remains Bullish On China Despite A Looming '100-Year Storm': 'The Time To Buy Is When Everyone Hates The Market'

Ray Dalio, the renowned billionaire investor, has made a case for investing in China’s stock market, even as the country grapples with significant economic and geopolitical challenges.

What Happened: Dalio shared his perspective in a LinkedIn post on Wednesday. He believes that the most opportune moment to invest is when markets are deeply unpopular and undervalued, a situation he sees in the current Chinese equity market.

He wrote, “The time to buy is when everyone hates the market and it’s cheap (which is now the case in Chinese equities), especially when it looks increasingly likely that the economic leadership is about to do something like a ‘beautiful deleveraging.'”

Dalio previously warned of a potential “100-year storm” for China, citing the wealth gap, high debt levels, and geopolitical tensions, especially with the United States. Despite these risks, he views them as manageable with the right leadership actions.

He points out that Chinese firms have suffered a $7 trillion loss since 2021, but notes that the country’s policymakers are moving towards quantitative easing and debt restructuring. Dalio argues that, despite investor concerns, China still offers valuable investment opportunities based on strong fundamentals.

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“I can’t diversify as well as I’d like to without investing in China. For example, China and the US are the only dominant powers in the most important industries and how these two nations are with each other will shape the world,” he said, citing that the nation will remain a core position in his portfolio,” he mentioned.

Why It Matters: Dalio’s endorsement comes amid his warnings of a potential “lost decade” for China if it fails to address its debt issues. This cautionary stance was echoed earlier in March by economist Mohamed El-Erian, who advised investors to treat China as a short-term speculation rather than a long-term bet.

However, there are signs of economic stimulation, such as the Industrial & Commercial Bank of China Ltd’s commitment to fund $41 billion in the country’s tourism sector. This move indicates proactive steps by Chinese financial institutions to mitigate economic downturns and boost growth sectors.

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