Billionaire Ray Dalio thinks tech investors will have to choose between the U.S. and China: ‘The technology war isn’t going away’

William of England
By William of England 4 Min Read

In August, the Biden administration barred U.S. investors from investing in Chinese firms working in semiconductors, quantum computing, and AI. And main Silicon Valley funds like Sequoia Capital and GGV Capital are actually ditching their China enterprise to defend themselves from political danger. 

Ray Dalio, billionaire investor and founding father of hedge fund Bridgewater Associates, addressed the Fortune Global Forum in Abu Dhabi and agreed that high-end tech investors will have to choose a facet between Washington and Beijing. 

“That’s real,” he mentioned Wednesday. “It’s a fact.” 

“It’s part of the policy of this new type of competition between the two powers.”

Dalio, who has lengthy praised China’s financial improvement, has fearful about battle all through the yr. “We really were on the brink of war” final March, Dalio mentioned. “Sanctions getting past a certain point … would be devastating for the world economy.”

Dalio talked about his lengthy monitor document of normal visits to China since 1984 and his go to final March. He mentioned he’s fearful about “irreconcilable differences, and certain things have happened since then … the devastation if you had a bad economic war, sanctions getting past a certain point, and the like, would be devastating on the world economy, and the issue of military economy so that they [the U.S. and China] couldn’t even talk.”

He in contrast current chip sanctions on China to the oil sanctions imposed on Imperial Japan forward of the Second World War, repeating an argument he made earlier in the yr.

Last October, the Biden administration ordered an export ban on superior semiconductors to Chinese firms, in a bid to kneecap its rival’s chip business. “Chips are like oil,” Dalio mentioned on Wednesday.  

But now “there’s been an important stepping back” in U.S.-China tensions forward of the mid-November assembly between U.S. President Joe Biden and Chinese President Xi Jinping round the APEC summit in San Francisco, Dalio mentioned.

U.S. and China dialing again tensions

In current months, China and the U.S. have tried to dial again tensions.

Both nations have agreed to arrange working teams to speak by commerce and commerce points. Then, in mid-November, the two governments introduced a brand new settlement on local weather cooperation and pledged to restart army dialogue.

Xi additionally promised to curtail the export of supplies used to make fentanyl. 

Dalio attended a personal dinner with President Xi Jinping in San Francisco, alongside different enterprise leaders like Apple CEO Tim Cook and Tesla CEO Elon Musk.

On Wednesday, Dalio mentioned that Beijing’s technique was now to pursue a “nonviolent war.” Citing Sun Tzu’s The Art of War, he mentioned that China believes that “if you go through a military war, you weren’t smart enough to win without a military war.”

“The conflict is more like intense competition,” he steered.

Yet at the same time as the relationship between Beijing and Washington thaws barely, the U.S.’s continued effort to constrain China’s tech sector will proceed to be a drag on the relationship.

In October, the U.S. barred much more chips from being bought to China.

“The technology war isn’t going away, and how far it passes will be constant terms of negotiations” between Washington and Beijing, Dalio mentioned Wednesday.

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