A 76-year-old discusses today’s hottest macro topics—global geopolitics and the AI industry.

Article author and source: Odaily Planet Daily

Source: The Wall Street Weekly: Dalio's Warning & Ray Dalio on U.S.-China AI Development

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 long attracted widespread attention, particularly his insights into global macroeconomic conditions and various industries, which are frequently discussed by many. Following recent visits to China by U.S. President Trump, Russian President Putin, and other world leaders, Dalio has offered new perspectives—stating that “the global order is shifting, and a tributary system led by China is emerging.” Recently, he also shared his specific views on the “intense competition between U.S. and Chinese AI giants.” The following content has been compiled and translated by Odaily Planet Daily, with some details edited for clarity.

Ray Dalio on "A World Dominated by China": The Tributary System Reemerges

Last month, after U.S. President Trump and Russian President Putin successively visited China, Ray Dalio was interviewed by David Westin from Bloomberg’s “Wall Street Week.”

In the program, Ray Dalio bluntly stated, “The United States’ credibility as a global power willing to fight for its own interests is declining, while China is continuously accumulating its own global wealth and worldwide influence. This shift is fundamentally changing how other countries around the world view these two nations.”

Currently, the United States maintains approximately 750 military bases in over 80 countries worldwide, and has long been regarded as a reliable ally in the event of (war-related) attacks. However, after concluding a roughly month-long trip across Asia—including nearly 10 days of meetings with multiple leaders in China—Ray Dalio sensed a significant shift: an increasing number of countries are beginning to believe that “the United States cannot be counted on to win a war.”

Ray Dalio’s remarks further elaborate on his long-held view: “The strength of the United States is gradually declining, while China’s strength is steadily growing.” This perspective has gained considerable acceptance due to Bridgewater Associates, Dalio’s firm, having extensive engagement with China. On the other hand, his views have also faced significant criticism due to his close relationships with Chinese leaders.

Dalio then stated that international recognition is very important for China. Currently, China’s economic size is about 60% to 70% of that of the United States, a ratio that has more than tripled over the past 20 years. He said that although China does not seek to conquer or occupy other countries, it places great importance on recognition from political leaders around the world. “You can see that leaders from many countries are visiting China, much like China’s historical ‘tribute system’—where nations come to acknowledge and respect China’s strength—but this system is not oppressive or controlling.” (Odaily Planet Daily note: The original term used was ‘tribute system’)

Thus, this tributary system was essentially a hierarchical system, and when dealing with other nations, it was crucial how this system influenced trade and national security between the parties. I believe that, from a political perspective, we are now entering a period in which similar tributary-style arrangements will emerge between China and various countries, and the relative power among nations will become the decisive factor in global geopolitics.” During this process, Ray Dalio also noted that it was only by the mid-17th century that Western societies gradually developed concepts such as nation-states and borders; prior to that, power structures in Western societies were composed of different royal families, which differed fundamentally from China’s longstanding conception of frontiers.

He believes this change will directly impact (global) markets, including capital and finance, as investors must navigate the current volatility: currency values are at risk, and global uncertainty demands that investors maintain liquidity and diversify their asset allocations, including investments in gold.

Ray Dalio on the "U.S.-China AI Competition": China's AI industry will develop like its electric vehicle industry.

In June, Business Insider reported on Ray Dalio's views regarding the competition between China and the U.S. in the AI sector, also highlighting the significant differences and potential implications between the two.

Ray Dalio said that China views artificial intelligence as an important tool that should be accessible to all workers. “It’s like electricity and running water—something everyone should have access to,”

As a prominent entrepreneur who first visited China as early as 1984, Ray Dalio has long been highly optimistic about China’s development. Previously, at a Forbes magazine event in New York, he told attendees: “China has generated substantial profits through exports, and these funds have been widely invested in research and development in artificial intelligence, driving economic growth by improving productivity.”

It is worth noting that Ray Dalio emphasized that while U.S. companies like OpenAI and Anthropic are adjusting their subscription pricing structures to increase revenue in preparation for an IPO, Chinese companies are focused on making their models accessible to as many ordinary employees as possible. “It doesn’t have to be expensive, and it doesn’t even necessarily have to be profitable right now.”

To some extent, Dalio believes, it mirrors the country’s successful path in industries such as electric vehicles—domestic Chinese companies like BYD have achieved rapid growth in markets such as Europe.

During the panel discussion following Dario’s speech, JPMorgan executive Mary Callahan Erdoes noted that, unlike in the United States—where employment issues are often treated as political topics—Chinese AI executives and policymakers do not express fear that AI will disrupt jobs. Instead, the country focuses on “leveraging AI to drive progress” and is committed to identifying the next industry in which it can achieve dominance. “The robotics sector can essentially be viewed as China’s ‘next-generation electric vehicle industry,’ ” she said.