The founder of Bridgewater Associates and billionaire investor, Ray Dalio believes that the United States and China have moved back from the “brink” of war amid the escalating tensions on both sides. The insights by the global financial expert come ahead of the
US President Joe Biden and China President Xi Jinping’s scheduled meeting on the sidelines of the 30th Asia Pacific Economic Cooperation (APEC) in San Francisco on Wednesday, November 15.
While sharing his analysis in brief, the billionaire investor wrote in a LinkedIn post on Tuesday, “The realisations by both sides that they were at the brink and the looking over the brink into the abyss scared the leaders on both sides so, starting in June, there were a number of interactions designed to pull back from the brink, including beginning working toward a good APEC meeting between President Biden and
President Xi, which will lead to some modest increased cooperation.”
He raised an argument that the conflict between the two nations,
the US and China, is emerging in a way that reflects in reducing the odds of a “military war”, though a new type of ‘war’ between the two powers “will remain intense and threatening.” Following the same, Dalio mentioned having a “very rough estimate” of the probability of US-China military combat is around 35% over the coming ten years.
Dalio also stated on the LinkedIn post that this new type of war ‘is not so new’ as it can be familiar to all who have read Sun Tzu’s “Art of War”, which is roughly a 2,500-year-old treatise on warfare. The hedge-fund founder further wrote, “This type of war is fought by using deception, by having the other side expend resources while saving one’s own, and by using the opponent’s own circumstances to weaken them and take advantage of their weakness.”
He explains how well each side manages its own financial, economic, technological and social strengths relative to the opposition will be more important than building and using their military strengths. Military power is still important for intimidating the enemy and possibly using them if the other non-military strategy fails to be accomplished.
Dalio said that history has proven that the winner of the “technology war” is also the winner of “economic and geopolitical wars”. They usually take the form of developing new technologies that are used to make weapons, such as the US development of the atomic bomb during World War II. He wrote, “We can see this technology war principle playing out today with chips and AI, quantum computing, and many other technologies, including those we don’t know about.”
He further warned, “Rather, we should expect to see a more behind-the-scenes, Cold-War-style great power conflict.”
Apart from Ray Dalio, JPMorgan’s CEO Dimon, BlackRock’s chief Larry Fink, and another hedge fund giant David Eirnhorn have also mentioned about how the war could bring the global economy into a massive recession and disrupt the financial markets.
Meanwhile, the White House has highlighted the primary objectives of the summit as ‘enhancing communication to prevent potential conflict between the two nations’, according to reports. It is anticipated that the possible topics to be discussed might include the global concern spanning conflicts in the Middle East and Russia’s actions in Ukraine and human rights, artificial intelligence and other trade relations.
(Edited by : Sudarsanan Mani)
