SHANGHAI/BEIJING — Hedge fund mogul Ray Dalio is optimistic that next month’s long-awaited U.S.-China presidential meeting could go a long way toward easing bilateral tensions.
“The next meeting will have a special focus not only on trade but also on capital flows,” the Bridgewater Associates founder told CNBC’s Eunice Yun in Shanghai on Wednesday.
Dalio said he hoped the two leaders would show “empathy” and work together to address challenges. “Investors should be encouraged by these things,” he said, noting that this “transfers” to investments and markets.
Although the three major U.S. stock averages have recovered from the drop caused by trade tensions about a year ago, the S&P 500 index is still down more than 3% since the start of the year, due in part to concerns over the Iran war.
US President Donald Trump is scheduled to visit Beijing on May 14th and 15th and meet with Chinese President Xi Jinping. President Trump was originally scheduled to visit Japan in late March, but the plan was postponed due to the impact of the Iran war.
Dalio, who wore a pin emblazoned with the flags of both the United States and China, said the lack of contact between the United States and China was the “biggest cause” of bilateral tensions.
He was in Shanghai for a ceremony marking the end of an eight-day ocean exploration voyage organized by his nonprofit OceanX and U.S. and Chinese organizations to support bilateral relations. Dalio founded OceanX with his son Mark in 2016 to advance the exploration and management of ocean resources.
The Shanghai event was also attended by the U.S. Consul General in Shanghai and the vice mayor of the Chinese city. The trip, which started in Hong Kong, was attended by 10 students from each country.
“The China-U.S. relationship and the oceans are two of the most important things to human well-being,” Dalio said.
As tensions between the United States and China have been rising for years, climate change has been widely seen as a unique area of cooperation between the two countries.
Next month’s meeting between Trump and Xi could be the first of four direct meetings between the two leaders this year, Dalio said. “The world order is changing and the two leaders need to discuss how best to approach it,” he added.
The presidents of the world’s two largest economies met in South Korea last fall and agreed to lower tariffs for one year. The Chinese government also postponed implementation of stricter rare earth export controls until the same time.
Asked about the Iran war and President Trump’s announcement of a two-week cease-fire, Dalio stressed that investors should look beyond “the news of the day,” saying, “There is some kind of world war going on.” In a LinkedIn post published Tuesday, he said the current combination of military confrontations, geopolitical and economic tensions is comparable to past world wars.
