Ray Dalio, founder of the world’s largest hedge fund, warned of a brewing capital war between the U.S. and China that could expand beyond trade imbalances and fights over tech and intellectual property theft.
Dalio was one of several speakers, including former Richard Nixon Secretary of State Dr. Henry Kissinger, at the National Committee on U.S.-China Relations annual black-tie gala dinner on Thursday.
“My responsibility as a global economic investor is to find the elements that make countries succeed and fail, and to quantify those indicators,” the Bridgewater Associates founder Dalio said, according to tweets by the NCUSCR. “There is a trade war, there is a technology war, there is a geopolitical war and there could be a capital war. How that is approached is going to determine our futures. I hope that it is done with mutual understanding instead of wars — a win-win relationship rather than a lose-lose relationship.”
Kissinger, who was a diplomatic driving force behind Nixon’s monumental visit to China in 1972, went on to say that conflict between the U.S. and China is “inevitable” and the result will be “catastrophic,” “worse than world wars” unless the two sides can settle their differences.
“We are in a difficult period now. I am confident the leaders on both sides will realize the future of the world depends on the two sides working out solutions and managing the inevitable difficulties,” the 96-year-old Kissinger said. “There is no doubt many aspects of the evolution of China are challenging to the U.S. It never happened before that two major countries in different parts of the universe were in similar positions.”
If a new cold war breaks out between the world’s two largest economies, “it will be worse than the world wars that ruined European civilization,” Kissinger said.
“It’s no longer possible to think that one side can dominate the other,” he continued. “They have to get used to the fact that they have that kind of a rivalry.
“There were differences at the beginning of the relationship. Nevertheless, we’ve learned to live with each other for many decades.”