Original Source:"Wall Street Week" Program: Dalio's Warning&Ray Dalio on U.S.-China AI Development
Compiled by | Odaily Planet Daily (@OdailyChina)
Translated by | Wenser (@wenser2010)
Editor's Note: As the founder of Bridgewater Associates, the world's largest hedge fund, Ray Dalio's remarks have always garnered significant attention from all sectors of society. His insights into the global macroeconomic landscape and various industries are particularly popular topics of discussion. Following the consecutive visits to China last month by world leaders including U.S. President Trump and Russian President Putin, Ray Dalio offered a new perspective on the matter—"The world order is changing, and a China-led tribute system is being established." Recently, he also shared his targeted views on the "competition between AI giants in China and the United States." The following content is compiled and translated by Odaily Planet Daily, with some details edited for clarity.
Ray Dalio on a 'China-led World': The Return of the Tribute System
Last month, following the visits to China by U.S. President Trump and Russian President Putin, Ray Dalio was interviewed by David Westin on Bloomberg's "Wall Street Week" program.
During the interview, Ray Dalio stated bluntly, "The credibility of the United States as a global power willing to fight to defend its interests is declining, while China is steadily accumulating its own global wealth and influence. This situation is fundamentally changing how other countries view these two nations."
"Currently, the United States has approximately 750 military bases in over 80 countries worldwide, so it has long been seen as a trustworthy ally in the face of (wartime) attacks." However, after concluding a roughly month-long trip to Asia (which included about 10 days of meetings with various leaders in China), Ray Dalio sensed a significant shift: an increasing number of countries are gradually coming to believe that "the United States cannot be relied upon to win wars."
Ray Dalio's comments further elaborate on his long-held view: "American power is gradually waning, while China's power is correspondingly increasing." Thanks to Bridgewater's extensive engagement with China, this perspective has gained considerable acceptance. However, on the other hand, due to his relatively close relationship with Chinese leaders, these views have also faced criticism.
Dalio went on to say that international recognition is very important for China. Currently, China's economy is about 60% to 70% the size of the United States', a ratio that has more than tripled over the past 20 years. He stated that while China does not seek to conquer or occupy other countries, it places great importance on the recognition from political leaders of various nations. "You can see many national leaders visiting China one after another, which is akin to the 'tribute system' in Chinese history—countries coming to acknowledge and respect China's formidable strength, but this system is not oppressive or controlling." (Odaily Planet Daily Note: The original phrase was 'tribute system')
"So, this tribute system is actually a hierarchical structure. When dealing with other countries, what matters is how this system affects trade and national security between them. I believe, from a political perspective, we are now entering a period where arrangements similar to the tribute system will form between (China and) various countries, and the relative power of nations will become the decisive factor (in the world's political landscape)." During the discussion, Ray Dalio also mentioned that concepts like the nation-state and national borders only gradually emerged in Western societies around the mid-17th century. Before that, power structures in Western societies were composed of different royal families, which is fundamentally different from the concept of frontiers consistently present throughout Chinese history.
He believes this change will directly impact (global) markets, including capital and finance. Because investors must navigate the current turbulent situation: there are risks to currency values, and global uncertainty requires investors to maintain liquidity and diversify their asset allocations, including investing in gold.
Ray Dalio on the 'U.S.-China AI Competition Landscape': China's AI Industry Will Develop Like the Electric Vehicle Industry
In June, Business Insider reported Ray Dalio's views on the competition in the AI sector between China and the United States, also highlighting the significant differences and potential impacts.
Ray Dalio stated that China views artificial intelligence as an important tool that should be accessible to all workers. "It's like electricity and running water—something everyone should have access to," he said.
As a prominent entrepreneur who first visited China as early as 1984, Ray Dalio has long been optimistic about China's development. He previously told attendees at a Forbes magazine conference in New York: "China has earned huge profits through exports, and these funds are being extensively used for research and development in the field of artificial intelligence, thereby driving economic growth by enhancing production efficiency."
It is worth noting that Ray Dalio emphasized that while American companies like OpenAI and Anthropic are adjusting (AI model) subscription package structures, striving to increase revenue in preparation for going public, Chinese companies are focused on enabling as many ordinary employees as possible to use their models. "It doesn't necessarily have to be expensive, nor does it even have to be profitable (right now)."
"In a way," Dalio believes, "it mimics the successful path the country has taken in industries like electric vehicles—where domestic Chinese companies like BYD have achieved rapid growth in markets such as Europe."
During a guest discussion following Dalio's speech, JPMorgan executive Mary Callahan Erdoes pointed out that unlike the social atmosphere in the United States where "job issues are treated as political topics," executives of Chinese AI companies and politicians "do not express fear about AI impacting employment" when mentioning AI. Instead, the country focuses more on "leveraging AI to drive various developments" and is committed to finding the next industrial field where it can achieve dominance. "The robotics sector can basically be seen as China's 'next-generation electric vehicle industry,'" she said.
