SHANGHAI/BEIJING – Hedge fund magnate Ray Dalio is optimistic that a highly anticipated meeting of U.S. and Chinese presidents next month can go a long way toward easing bilateral tensions.
“The next meeting will have a particular focus on trade, but also capital flows,” Bridgewater Associates founder Eunice Yoon told CNBC in Shanghai on Wednesday.
Dalio said he expects “empathy” from the two leaders and overcoming challenges together. “Investors should be encouraged by these things,” he said, noting that it impacts investments and markets.
While the three major U.S. averages have recovered from losses during trade tensions about a year ago, the S&P 500 is still down more than 3% so far this year, partly due to concerns over the Iran war.
US President Donald Trump is expected to visit Beijing on May 14 and 15 to meet with Chinese President Xi Jinping. Trump was originally scheduled to travel in late March, but delayed plans due to the Iran war.
The lack of contact between the US and China is “the biggest cause” of bilateral tensions, said Dalio, who wore a pin with the US and Chinese flags.
He was in Shanghai for a ceremony marking the end of an eight-day ocean exploration trip organized by his nonprofit OceanX and U.S. and Chinese groups supporting bilateral relations. Dalio founded OceanX with his son Mark in 2016 to promote the exploration and management of marine resources.
The event in Shanghai was also attended by the US Consul General in Shanghai and a vice mayor of the Chinese city. Ten students from both countries took part in the trip, which began in Hong Kong.
“China-US relations and the oceans are the two most important things for the well-being of humanity,” Dalio said.
As tensions between the U.S. and China have escalated over the years, climate has been widely seen as a rare area of cooperation between the two countries.
A meeting between Trump and Xi next month could be the first of four meetings between the two leaders this year, Dalio noted. “The world order is changing and these two leaders need to discuss how best to address it,” he added.
The presidents of the world’s two largest economies met in South Korea last fall and agreed to cut tariffs for a year. During the same period, Beijing also postponed imposing stricter export controls on rare earths.
When asked about the Iran war and Trump’s two-week ceasefire announcement, Dalio stressed that investors should look beyond the “news of the day,” saying that “some kind of world war is underway.” In a LinkedIn post published on Tuesday, he said the current combination of military confrontations, geopolitical and economic tensions was comparable to previous world wars.
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