Source:"Wall Street Week" Program: Dalio's Warning&Ray Dalio on China-U.S. AI Development
Compiled | Odaily Planet Daily (@OdailyChina)
Translator | 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 various sectors of society. His insights into the global macroeconomic landscape and different industries, in particular, are a frequent topic of discussion. Following the visits to China last month by leaders including US President Donald Trump and Russian President Vladimir Putin, Ray Dalio has put forward a new perspective – "The world structure is changing, a China-led tribute system is being established." Recently, regarding the "competition landscape between AI giants in China and the US," he has also offered his targeted views. The following content is compiled and translated by Odaily Planet Daily, with some details edited for brevity.
Ray Dalio on a "China-led World": The Reappearance of the Tribute System
Last month, after US President Donald Trump and Russian President Vladimir Putin visited China, Ray Dalio was interviewed by David Westin for Bloomberg's "Wall Street Week" program.
In the interview, Ray Dalio stated directly, "America's credibility as a global power willing to fight for its own interests is declining, while China is continually accumulating its own global wealth and world influence. This situation is fundamentally changing how other countries view these two nations."
"Currently, the United States has about 750 military bases in over 80 countries worldwide, and thus has long been seen as a trustworthy ally when facing (war) attacks." However, after concluding a roughly one-month trip to Asia (which included about 10 days of meetings with multiple leaders in China), Ray Dalio sensed an important shift: a growing number of countries are gradually coming to believe – "America cannot be counted on to win wars."
Dalio's remarks further elaborate on his long-held view: "America's strength is gradually waning, while China's strength is correspondingly increasing." Thanks to Bridgewater's significant engagement with China, this perspective has gained considerable acceptance. On the other hand, due to his relatively close relationship with Chinese leaders, these views have also drawn criticism.
Dalio then stated that international recognition is very important for China. Currently, China's economic scale is about 60% to 70% that of the United States, a proportion that has more than tripled over the past 20 years. He said that while China does not seek to conquer or occupy other countries, it places great emphasis on recognition from political leaders worldwide. "You can see leaders from many countries visiting China one after another, which is akin to the 'tribute system' in Chinese history – countries come to acknowledge and respect China's formidable strength, but this system is not an oppressive or controlling one." (Odaily Planet Daily Note: The original term used was 'tribute system')
"So, this tribute system is essentially a hierarchical structure. When dealing with other countries, what's important is how such a system affects trade and national security between the parties. I believe, from a political perspective, we are now entering a period where arrangements resembling a tribute system will form between (China and) various countries, and the relative strength between nations will become the determining factor (in the world's political landscape)." During the discussion, Ray Dalio also mentioned that concepts like the nation-state and borders only gradually emerged in Western societies around the mid-17th century. Before that, power structures in Western societies were constituted by different royal families, which is fundamentally different from the concept of frontiers consistently maintained throughout Chinese history.
He believes this change will directly impact (global capital and financial) markets. Because investors must navigate the current turbulent situation: currency values are at risk, and (global) uncertainty demands that investors maintain liquidity and diversify their asset allocations, including investments in gold.
Ray Dalio on the "Competition Landscape in AI Between China and the US": China's AI Industry Will Develop Like the EV Industry
In June, Business Insider reported Ray Dalio's views on the competition in the AI sector between China and the United States, similarly highlighting the vast differences and potential implications between the two.
Ray Dalio stated that China views artificial intelligence as an important tool that should be accessible to all workers. "It's like electricity and tap water, something everyone should have access to,"
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 enormous profits through exports, and these funds are being widely utilized for research and development in the field of artificial intelligence, thereby driving economic growth through improved 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 public listings, Chinese companies are committed to making their models accessible to as many ordinary employees as possible. "It doesn't necessarily have to be expensive, and it doesn't even necessarily have to be profitable (right now)."
"To some extent," Dalio believes, "it mimics the country's successful path in sectors like the electric vehicle industry – where domestic Chinese enterprises like BYD have achieved rapid growth in markets such as Europe."
In a guest discussion following Dalio's speech, JPMorgan Chase executive Mary Callahan Erdoes pointed out that unlike the social atmosphere in the US, where "employment issues are treated as political topics," executives of Chinese AI companies and political figures, when mentioning AI, show "no fear of AI displacing jobs." Instead, the country focuses more on "leveraging AI to drive various developments" and is committed to identifying the next industrial sector where it can achieve dominance. "The robotics sector can basically be seen as China's 'next-generation electric vehicle industry,'" she stated.
