Dalio says Beijing's crackdown on technology firms has been misinterpreted
Beijing's recent crackdown on technology and education stocks was misinterpreted by Western investors as "anti-capitalist", a well-known hedge fund manager said.
In a post on his LinkedIn account on 30 July, Ray Dalio, the co-chief of Bridgewater Associates, said: "China is a state capitalist system, which means that the state runs capitalism to serve the interests of most people and that policy makers won't let the sensitivities of those in the capital markets, and rich capitalists stand in the way of doing what they believe is best for most people of the country."
Dalio was referring to recent decisions by Chinese authorities, such as barring ride-hailing app Didi from signing up new customers while it reviewed the company's data-collection policies.
Similar decisions against other technology groups had been adopted on anticompetitive grounds, inconsistent pricing, or in response to alleged shortcoming in their work practices.
Both Chinese and US markets hold opportunities and risks, yet remained competent diversifiers.
"Hence they both should be considered as important parts of one's portfolio," Dalio said.
"I urge you to not misinterpret these sorts of moves as reversals of the trends that have existed for the last several decades and let that scare you away."