Ray Dalio Backpedals On 'Misunderstanding' Of His China Human Rights Remarks

Hedge fund executive Ray Dalio backpedaled on comments he made last week that seemed to deflect his concern for human rights abuses in China, acknowledging he “sloppily answered” a query raising questions about human rights in the U.S. while comparing the actions of the Chinese government to a “strict parent.”

What Happened: Dalio's controversy began during a Nov. 30 interview on CNBC's “Squawk Box,” when Dalio was asked how human rights in China impacted his investing decisions, and he responded that he “can’t be an expert in those types of things” while questioning his country’s respect of its citizens’ liberties.

“I look at the United States and I say, ‘Well, what’s going on in the United States and should I not invest in the United States because our own human rights issues and other things?’ and I’m not trying to make political comparisons,” he said. “I basically just trying to follow the rules understand what’s going on and invest properly.”

Dalio then insisted that whereas the U.S. is a “country of individuals and individualism,” he viewed China’s government as an “extension of the family — as a top-down country, what they are doing is they behave like a strict parent. That is their approach, we have our approach.”

Dalio’s comments brought a rebuke on Twitter Inc T from Sen. Mitt Romney (R-UT), who accused the founder and co-chairman of Bridgewater Associates of profiting from investing in China while blithely ignoring the country's human rights abuses.

“Ray Dalio is brilliant and a friend, but his feigned ignorance of China’s horrific abuses and rationalization of complicit investments there is a sad moral lapse,” Romney tweeted. “Tragically, it is shared by far too many here and throughout the free world.”

See also: PreMarket Prep: When Will Tech Stocks Recover?

What Happened Next: On Dec. 5, Dalio took to his social media pages, writing “Now that things have calmed down I want to clarify what I meant when I sloppily answered a question about China from Andrew Ross Sorkin that created a misunderstanding of my views. I assure you that I didn’t mean to convey that human rights aren’t important because I certainly believe they are and I didn’t mean to convey that the US and China deal with these issues similarly because they certainly don’t.”

Dalio claimed that his “strict parent” remark was an attempt to “explain what a Chinese leader told me about how they think about governing — about how Confucianism is based on the family and that extends into their governance, which is a more autocratic approach that is like a strict parent. I was not expressing my own opinion or endorsing that approach.”

He added that for Bridgewater other companies doing business in China, “there are many other geopolitical and regulatory issues that are constantly changing and are beyond our capacity to weigh against the responsibilities we have to our clients.”

As a result, he added, his company relies “most heavily on the guidance of both the US government and the governments of the countries we are in.”

Yet Dalio also seemed to minimize his comments, adding “what I think and what Bridgewater does are of minuscule importance relative to the rapidly growing risk of US war with China due to misunderstandings and inclinations to fight, so I hope that thoughtful attention will be paid to that issue and that mutual understandings will increase and inclinations to fight will diminish.”

Photo: Ray Dalio, Moritz Hager/World Economic Forum via Flickr