Billionaire hedge fund manager Ray Dalio sees a three to five years of restructuring after the coronavirus pandemic, that will lead to a shift away from a reliance on Chinese supply chains.
The pandemic has exposed the centrality of China in global supply chains. President Trump has criticized China several times and labelled the coronavirus as the “Chinese virus.” However, the US still has to import a lot of medical supplies from China.
Ray Dalio sees restructuring
Dalio, the founder of Bridgewater Associates, said the pandemic has brought US’ “vulnerability” in the forefront. The US is importing masks and ventilators from China amid the health crisis but according to Dalio “we’re going to want to build those things to build self-sufficiency.” He was speaking in a live LinkedIn interview on Tuesday.
The asset manager is not alone in seeing a shift in production away from China and several other analysts have echoed similar woes. Japan has announced a stimulus for its companies that shift production from China while India is laying a red carpet for foreign companies who want to shift their production from China.
Dalio believes that a lot of countries would have to dip in their reserves to contain the pandemic’s financial pain. However, he added, “some of them will run out of those savings, even the rich countries…a lot of the world will not be protected.”
Almost all major economies have announced stimulus packages and more policy support is being discussed. Dalio also expects global inflation to rise. He also sees the savings rate rising globally.
Ray Dalio has a net worth of $18bn and is among the world’s top 50 richest people. He founded Bridgewater Associates in 1975 that currently manages around $160 billion in assets. Born to a jazz musician father, Dalio started his career on the floors on the New York Stock exchange trading commodities.