Original text comes from:The Wall Street Journal Program: Dalio's Warning&Ray Dalio Talks About AI Development in China and the US

Compiled by | 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, particularly his insights into the global macroeconomic situation and different industries, which are topics of much discussion. Following the visits of leaders such as US President Trump and Russian President Putin to China last month, Ray Dalio also put forward his new perspective on this matter—“the world order is changing, and a tribute system led by China is being established.” Recently, regarding the "AI giants competition" between China and the US, he provided his targeted views. The following content is organized and translated by Odaily Planet Daily, with some details modified.

Ray Dalio Talks About "A World Led by China": The Resurgence of the Tribute System

Last month, after US President Trump and Russian President Putin visited China, Ray Dalio was interviewed by David Westin from Bloomberg's Wall Street Journal Program.

During the program, Ray Dalio stated, “The credibility of the US as a global power willing to fight for its interests is declining, while China is continuously accumulating its own global wealth and influence. This situation is fundamentally changing how other countries view these two nations.”

“Currently, the US has about 750 military bases in over 80 countries, which has long been seen as a reliable ally when facing (military) attacks.” However, after Ray Dalio concluded his roughly one-month trip to Asia (which included about 10 days of meetings with multiple leaders in China), he sensed a significant change: an increasing number of countries gradually believe—“we cannot rely on the US to win wars.”

Dalio's remarks further elaborate on his long-held view: “The strength of the US is gradually weakening, while conversely, the strength of China is continuously increasing.” Thanks to frequent interactions between Bridgewater Associates and China, this viewpoint has received considerable recognition. However, on the other hand, due to his relatively close relationship with Chinese leaders, his perspectives have also faced considerable criticism.

Dalio then stated that international recognition is very important for China. Currently, China's economy is about 60% to 70% of that of the US, a ratio 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 highly values the recognition from political leaders of various countries. “You can see that many leaders of different countries are visiting China, which is akin to the ‘tribute system’ in Chinese history—countries come to acknowledge and respect China's powerful strength, but this system is not oppressive or controlling.” (Odaily Planet Daily Note: The original phrase was 'tribute system')

“Therefore, this tribute system is essentially a hierarchy, and when dealing with other countries, it is important how this system influences trade and national security between the parties. I believe that 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 strength between countries will become a decisive factor in the (global political situation).” During this process, Ray Dalio also mentioned that it was not until the mid-17th century that Western society gradually developed concepts of nations and borders; before that, the power structure in Western society consisted of various royal families, which is distinctly different from the frontier concept that has always been upheld in Chinese history.

He believes that this change will directly impact (global) markets, including capital and finance. Because investors must cope with the current turbulent situation: the risk of currency value, along with (global) uncertainty, requires investors to maintain liquidity and accomplish diversified asset allocation, including investments in gold.

Ray Dalio Talks About "The AI Competition Between China and the US": The Chinese AI Industry Will Develop Like the Electric Vehicle Industry

In June, Business Insider reported on Ray Dalio's views on the competitive landscape of AI between China and the US, also mentioning the significant differences and potential impacts between the two.

Ray Dalio stated that China views artificial intelligence as an important tool that should be owned by all workers. “It is like electricity and running water; it is something everyone should have access to,”

As a well-known entrepreneur who first visited China as early as 1984, Ray Dalio has long been optimistic about China's development. Previously, he told attendees at a Forbes conference held in New York: “China has generated huge profits through exports, and this funding has been widely utilized in the R&D of artificial intelligence, thus pushing economic growth by improving production efficiency.”

It is worth mentioning that Ray Dalio emphasized that while American companies like OpenAI and Anthropic are adjusting their subscription model structures to increase revenue in preparation for going public, Chinese companies are focused on enabling as many ordinary workers as possible to use their models. “It doesn't have to be expensive, and it doesn't necessarily have to be profitable (right now).”

“To some extent,” Dalio believes, “it mirrors the successful pathway that the country has taken in sectors like the electric vehicle industry—Chinese companies, such as BYD, have achieved rapid growth in markets like Europe.”

During the guest discussion following Dalio's speech, JPMorgan executive Mary Callahan Erdoes pointed out that contrary to the atmosphere in the US, where “employment issues are viewed as a political topic,” executives of Chinese AI companies and political figures do not express “fears of AI impacting employment” when discussing AI. On the contrary, the country is more focused on “utilizing AI to drive various developments,” and is committed to finding the next industry that can achieve dominance. “The robotics sector can basically be seen as China’s ‘next-generation electric vehicle industry,’” she said.

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