Ray Dalio Advises China on Strategies to Combat Debt Crisis

Ray Dalio, the founder of Bridgewater Associates, delivered significant remarks at the FutureChina Global Forum in Singapore, calling for a 'beautiful deleveraging' strategy for China. This recommendation arrives amid various stimulus measures initiated by Beijing to bolster economic activity. During his talk, he emphasized that a balanced approach, incorporating debt restructuring and money printing, is vital to manage the rising debt levels effectively. Dalio explained that debt restructuring tends to have a deflationary impact, while the creation of money is inflationary. By combining these methods, he believes China can alleviate its debt burden more effectively. His confidence in China's ability and willingness to execute such a strategy reflects the confidence in recent policies observed by the government. Further emphasizing the complexities of the Chinese economic landscape, Dalio noted the potential for a massive fiscal stimulus package that could reach 10 trillion yuan ($1.4 trillion). He voiced concerns about shifting economic policies that investors must navigate, highlighting the intricacies associated with China's approach to capitalism and structural changes within its economy. Dalio's comments coincide with the positive economic growth, as evidenced by China’s GDP growth of 4.6% in the third quarter, suggesting that sound policy measures could help sustain and improve economic conditions moving forward.