Ray Dalio: CHINA Town Hall 2020

[Music] [Applause] good evening good afternoon and good morning to all i'm steve orleans the president of the national committee on u.s china relations and employees to welcome audiences from 78 partner organizations in the united states and four partners in china as well as individuals from around the world to the national committee's 14th annual chinatown hall today's program comes at a critical time in u.s china relations with the election of a new president both countries have the ability to improve the relationship for the benefit of both peoples sino-american relations has a profound impact on communities across our country so we hope that the issues raised during our program today will spark an educated and lively discussion at your local town hall conversations in view the importance of these issues to the future of america the national committee has adapted the format of chinatown hall this year expanding from a single night into a multi-night series of programming to address the range of issues confronting the relationship after tonight's keynote we will host subsequent evenings on economics and trade climate and health and society and culture in addition a fifth mandarin language event will be held for our chinese speaking audiences in the united states china and around the world we hope you can join us for those nights as well information can be found on our website at ncuscr.org backslash cth as the president-elect formulates policies towards china and the rest of the world we need to have a full and frank discussion of where american interests lie so we are thrilled to welcome ray dalio as keynote speaker at chinatown hall ray is the founder co-chief investment officer and co-chairman of bridgewater associates the largest hedge fund in the world he's the author of new york times bestseller principles life and work and the upcoming the changing world order why nations succeed and fail which i just had the pleasure of completing and is a must read and will be released this winter with over 35 years of business personal and philanthropic and engagement with china he offers special insights into china and u.s china relations i'd like to thank our partners at all 82 venues across the united states and china who have transitioned seamlessly in this virtual world to bring this year's china town hall conversation to their local communities let me thank our speakers a veritable who's who of u.s china relations we also want to thank the henry lewis foundation for their support in funding chinatown hall finally let me thank our dedicated staff at the national committee for putting this program together thanks to all who have submitted questions in advance and throughout the webcast we encourage you to join the conversation on social media using the hashtag cth2o2o and tagging at ncuscr without any further ado i'd like to turn it over to ray dalio for his keynote remarks ray well thank you steve for uh inviting me to share my thoughts uh with you and others uh during this most uh remarkable time for china for the united states and for our relationship uh before describing uh what this time looks like to me i would like to share with you a bit of my background which affects my biases maybe my perspective is influenced by being a global macro investor for over 50 years and and having a lot of contact uh with chinese economy its markets and its senior policy makers who are responsible for the economy in the markets uh in my job i've followed all major economies over those 50 years looking at the big drivers of their economic performances to bet on how well these countries and their markets would do uh in 1984 i was first invited to china by siddiq which was the only window company at the time i mean basically that meant that it was closed to the rest of the world and acidic which was formed by a capitalist first capitalist thank you bingham pointed it was allowed to look at the outside world and learn from it and so i was invited to teach them about the financial markets that began the relationship five years later in 1989 uh my friends at siddiq introduced me to seven young great people who were called the securities exchange executive council uh which was a group of seven people uh which was uh put together for the purpose of making the first stock market in china since um after liberation and um there was no money then really and they were in a dingy hotel um and these great people made the first stock market um and my relations continued and along the way i had contact with all sorts of people uh including very common people because my son went to an all-chinese school there when he was 11 and um eventually formed and ran uh a foundation for 12 years um that helped special needs orphans in china and that brought me to all sorts of par china and all sorts of people in china and that affected my perspective of china um in the 36 years since i first went to china i've seen china's per capita incomes increase by 25 times life expectancy increased by an average of 10 years and the average number of years of education increased by about 80 percent i saw capitalism develop and flourish and the capital markets develop and open up i saw how the chinese stock and bond markets became the second largest in the world i saw how close these things um i i saw up close how these things happen i also saw how china became much more welcoming to foreign investors for example uh while in 2015 um only one percent of the markets in china were accessible to foreign investors uh now over 60 percent are available to them uh because investing is a matter of finding uh relative attractiveness i make comparisons and comparisons are important and simultaneously with my um watching china evolved i watched the united states evolve in ways that uh concerned me um for example the printing the creating of a lot of debt and the printing of a lot of money which in history uh was a threat to reserve currencies and that prompted me to study um the rises and declines of reserve currency empires over the last 500 years the chart i'm showing you here goes back 500 years and it shows the major empires during that time this is an aggregate measure of uh power uh made up of eight other measures i'll explain in a second but uh the blue line is the u.s and the red line is china i think it pretty much exp speaks for itself in terms of um that progression of chinese power in many ways that uh power index is made up of eight gauges of powers which have been shown to be the most important these are the powers of education innovation and technology competitiveness in world markets share of world trade economic output military and the strength of the financial sector and the reserve currency this next slide shows uh each of these power indices um for the united states and china uh it they pretty much speak for themselves i won't take you through them we don't have time but you get the idea um but i would like to draw your attention to the two that are lagging the other measures of power in china they are the power of the reserve currency and the power of the financial markets in the financial sector these powers traditionally lag other powers but in inevitably catch up in studying history i saw that all leading trading empires over the last 500 years had the world's reserve currency and the world's financial centers during the 1600s and the 1700s the dutch gilder became the world's um uh reserve currency and amsterdam became the world's financial center after what we now call holland became the world's largest trading country in the 1700s and the 1800s the british pound became the world's reserve currency and london became the world's financial center and after that was after the british empire became the world's largest trading country and in the 20th century up until now the united states dollar uh became the world's reserve currency and new york became the world's financial center after the us became the world's largest trading country china is now the world's largest trading country i believe china is now evolving into that role uh even though china's shares of world trade and world gdp are comparable to the united states this year the remnb is less than two percent of global reserves world trade invoicing and cross-border lending in contrast the us dollar accounts for over 50 percent of global reserves and trade invoicing and is around 60 percent of cross-border lending i expect that to change as china moves to internationalize their mmd and open up its capital account capital china's capital markets are opening up to foreigners and non-chinese investors who are underweighted in them for example though china accounts for now roughly 15 of world equity markets capitalization it counts only for a couple of percent of global investors portfolios so i believe that this is a very special moment because simultaneously there will be the confluence of the rapid development of the chinese capital markets the opening up of these markets to foreign investors the relative attractiveness of them and the underweightedness of global investors in them and this is happening when the fundamentals uh are undermining the u.s dollars i believe that these developments are likely to lead to capital and knowledge inflows into china and that will benefit the chinese capital markets and more broadly benefit foreign investors and chinese investors too because of how i see things um and and the contact there i've been a chronic bull on china uh people have accused me of being biased naive and in some cases unpatriotic i think i'm just being objective maybe i'm missing some important things that this extremely well informed audience can help me see so i'm looking forward to our conversation steve uh that is a fabulous introduction and basically a statement about why your book is a must read because it really goes into a lot of those uh concepts in great in great detail so it's fair to summarize to say that you're looking at america in relative decline versus china and china relative ascent is there something that the united states can or should do to kind of prevent that relative decline well it you know it all comes back to those eight basics uh but uh you know it's but let's put it into basics um you have all individuals companies and governments at the end of the day have to earn more than they spend and they have to have a solid balance sheet um of assets which are greater than liabilities um and it and you could see reverberate through the economy with this shock those who have those things are in good shape and those who don't uh are in bad shape that's true whether or not you print your currency or not so what that means is you have to have um either be able to be more productive because we we're running deficits in these regards and now we're funding with that which we're printing um or so you have to raise your incomes or you have to cut your expenditures we're lucky to have the exorbitant privilege of the reserve currency which allows us to do that but we're testing the limits of that the other things that um successful empires have done over there is they have excellent broad in education and not education just in terms of subject matter but the teaching of civility of how people should be with each other and by and large they work in ways that can be competitive and inventive but they're rowing in the same direction and they're um as a result of that uh pursuing the same missions and they have a common dream you know we called it the american dream let's say if i think we need an american dream a dream of what what you know what are we going after that we can agree i thought it was equal opportunity i would believe an equal opportunity might be a good thing but anyway you have to have a common dream you have to have metrics behind that common dream and uh then you have to um be pursuing it together those through history have been you know the most uh key elements of countries successes the reserve currency question um you have fifty percent of reserves held in dollars two percent held in renminbi it's much more than global trade it's confidence in the currency since the renminbi is not truly convertible how can what's going to happen in the future that's going to convince those that are holding reserves to be holding rmb well um traditionally um you could see that uh there's the development of the r b by the way i think it'll evolve over decades but i think it'll evolve pretty quickly um they there is the loss of confidence in the reserve currency which drives people to see alternative storeholds of wealth so uh for example um when there's a debt uh issue um there are two ways of dealing with debt there there's hard money you know you're traditionally backed by gold and when that happened um then there was breakdowns in that monetary system the valuation so in for example uh classically march 1933 roosevelt um in with the debt problem uh was forced to go off the gold standard printed a lot of money devalued the dollar and then and then it moved on in 1971 we had the same nixon did the same thing went off the gold standard um and devalued and so on and the creation of a lot of debt and money means that money goes someplace else and it traditionally both of those cases it went into stocks gold and other places so money is always the holders of money which are the holders of bonds bonds are a promise to receive money a lot of money over a period of time it's a very long money position and when those become unattractive such as now let's say you get zero interest rate or close to zero interest rate or even a negative interest rate and there's a lot of creation of debt and um a lot of printing of money that drives um that into other assets they may not be another currency if there's not a good currency they may be stocks they may be gold and they may be another currency but it is that kind of time that we're in so next year and the year after no matter what we're going to have large deficits we are going to produce a lot of debt and we will monetize that debt and that debt will have a negative real return and therefore people will borrow in it we'll find it more advantageous to borrow in it then own it and then they will move to other assets so that is one ingredient um that's happening now at the same time as another number of ingredients the opening up of the we need convertibility don't we need convertibility no no you don't need it capital flows you don't need total convertibility history you have confidence if you're sitting in a central bank in japan or the eu or anywhere else if it's not ultimately convertible you have an obligation to your people no the convertibility it depends on the nature of the convertibility right the capital account by the way is going to be opened you're going to you're seeing now an opening up of the capital account you will see and you also see more internationalization of the remnb but today i'm an investor um in chinese capital markets um for the last couple of years it's been and i can safely bring my money in and out and i have to in making those decisions decide what the relative risks are of one type of risk versus another type of risk any country including the united states can establish capital controls um and there's a risk that countries china does have capital control one is theoretical one is actual but the degree of capital controls um as an investor who brings international money in and out of there some onshore some uh linked because of the links that they've created in hong kong for hong kong markets and so on i can get in various ways those types of exposures both onshore and offshore in a way that allows me to put my money in and take my money out i can do that um so it's not an impediment as a professional investor is doing this i can guarantee you it's not an impediment and so in making those choices now i recognize that at any time that that could be closed and you might have issues and so on just like i recognize you know it's it's a risk here but one has to weigh those risks because in re weighing those risk to be absent the chinese capital markets is very risky uh because if you're looking at this almost as being think of it just as diversification um there's the united states and there's china and basically those are the two big economies if you're dealing with mo industries of the future technology and so on um to be heavily weighted entirely weighted almost in the countries that are the older you know the reserve currency countries the united states jur um uh europe and japan and you look at those older more indebted countries that are having problems with monetary policy because they have to produce a lot of debt and produce a lot of money to do that and then you and to not be in china is to me in my opinion risky so i feel that i have to have a diversification and i compare those risks so none of the risks are zero it's just a matter of of assessing that and i can tell you yeah that market that foreign investors are moving in and the chinese are doing things to build confidence they can undermine it but i think that the diversification benefits are outweigh uh the risks did the delay of the ant uh ipo affect um that whole concept no and um it's it's it's such a good example that westerners i think are like on their edges of the seats and they pay so much attention to the one development you know we're almost like news hungry people what's today's development and they don't pay attention to the evolution um i've uh had a lot of dealings with uh chinese financial regulators and i could say that uh generally speaking no not generally speaking almost always speaking i found them to be reasonable caring and highly informed people who are now in an environment which is um changing at an extremely fast pace and that there's a risk of uh being uh too loose or too tight particularly on new types of uh investment the ant is a whole new concept innovative concept in terms of banking and almost could replace or threaten or the banking system in china and it hasn't yet been properly established in terms of regulatory review and the like and so that's an element and of course it's important to be clear that um what we have in china is state capitalism so state is going to control those things but i've watched in the united states in terms of regulatory authorities struggle to try to get the balance between freedom of what is being done and restrictions on what is being done right we had the financial crisis in the united states because they were too liberal in terms of controlling some of the things that were being done there's always a wrestling match on that and then i think ant got ahead of that um it's up to one to interpret that but anyway it's the regulatory authorities to decide that and then so i think it was progressing too fast and it had to be clear as to who the authority was at one point in my life i was an investment banker who did ipos if three days before an ipo the deal was pulled wow that probably would have been the end of my career at that point that's quite a you were not in good contact with the regulators if that happened um china is not the same we can't um judge china by the same exact standards in the same ways and i think that people could make the mistake of um mistaking imperfections for the changes in the directions so as i'm saying if you look at the directions and you look at what's going on those are the trends and those are the forces about the big things that i think that are going going on i mean one could make a strong argument that that if you compare the language of the third plenum of the 18th party congress which was in 2013 to the two weeks ago the fifth plenum of the 19th party congress with respect to state participation in the economy it's really quite starkly different um and a lot of the chinese miracle that you have witnessed in your 36 years and i've witnessed in my 41 years in china is based upon the private sector and is the miracle going to continue if the state is playing such a major role i think it's um it's important to understand to know the people and to understand the intentions and then interpret the actions in light of those particular intentions i think a lot of foreigners may misunderstand that the very strong reform policies that we've seen pervasively at an extremely fast pace are also happening at a time when there's not going to be um total or on um unleashed state-owned enterprises because there's certain benefits so i see they're wrestling with the question of what is what should be a state-owned enterprise and what shouldn't be a state-owned enterprise is that a strategic um enterprise should that be a problem public private partnership should it bring in equity um or and so the desire to um corporatize or privatize or whatever a lot of state-owned enterprises and at the same time to keep them also many of them control let's remember that this is a socialist um capitalist economy and that when matters of employment are entered into their um and direction everything is not a free market society um in the united states it's almost entirely uh entirely a free market that has good and bad things sometimes it's difficult to get resources to where the resources should go sometimes in education whatever in building infrastructure building roads is a challenge in the united states there are pros and cons but in this um state capitalist type of system there will be those types of controls and directions i don't i think it would be a mistake to say um that um the uh privatization let's call it of state-owned enterprises in china is not um happening the way we capitalists would like to mistake that to being that china is not being is not producing uh capitalist type of things like the development of capital markets um the increase in efficiencies i mean we could just look at the results you know we can look at how the covid was handled how their economy is handled and so thought if we're so hung up on getting it exactly that way they we might miss the bigger things that are going on you know i would argue that the returns on state-owned capital versus private capital are much much lower and ultimately they they will have to pay a price for it but that's but that's that's up to investors have the beauty of being able to decide whether they want to go into or not want to go into those enterprises but they're you you must agree that there's a plethora of uh wonderful companies that this year will probably have something like 40 percent of the ipos be china in the world big ipos um be chinese companies on chinese markets anyway a lot of them will be chinese companies on chinese markets and we as investors have to decide whether we want to go to those companies in those markets or not and so there's a lot there to offer while you might stay choose to stay clear of the uh say don't enterprises if you like okay well let's go to our first um audience question from jasmine fan at blackrock hello my name is jasmine fan from new york and my question is how do you think american investment companies should position themselves in the world of u.s china decoupling but also to consider opportunities in the gradual opening of china's financial market thank you thank you for your question i think the world is changing in very profound ways and i think that um sometimes when we look at it up close we can mix the big pictures of change and um that it is changing where china is um really gaining its stride um and anyway it will be a competitive power so i think that investors and um investment managers have a responsibility to um know china well be there um and make investments there as they must i'm a global macro investor so i have to be in all the major markets and assess those and i think that diversification and being there and being aware so that you have um an intimacy of understanding of what's going on in china and make that those choices from that intimate up close perspective i think is required if you're roughly at three percent now and you're saying a neutral weighting would be 15 how long do you think it'll take for international investors to move to that weighting how many years by the way that 15 is also growing at a fast pace so um i expect the 15 will grow and i expect that the uh 15 percent so the 15 will grow in the share of that will grow um i would expect um i can't tell you uh you know how fast but i would i would say maybe um you know something in the vicinity of a 30 to 50 percent uh growth rate and not probably more annual yeah yeah what is central bank digital currency going to play a role in this now that it's begun to be rolled out in in china the um let me um explain digital currencies for a second um um globally there are two purposes of an exchange rate and of a currency and that is is a medium of exchange in a store hold of wealth um there so there's the digitalizing of the clearing system um at no central bank i believe is going to allow an alternative currency to gain strength such as a bitcoin type of currency and so on the power of having your own currency and being able to print your own money is an enormous power and i don't think that you will see anything like that but the digitalization is not only efficient from a transaction point of view it helps to um minimize the risks of um the existing clearing system which is fairly heavily influenced by the united states some of our uh sanctions a lot of our sanctions as you might understand um which probably sanctions are our greatest power the united states greatest power happen by um influencing through sanctions uh currency movements uh through the swift clearing system and the like uh digitalization um helps to reduce those risks so that's what's going on with uh digitalization and i expect that it will be um it'll be successful even though ali and tencent already had what was in effect digital payment systems again is this was this a question of the state participating where the private sector was already in it this this is um the government um uh the currency offering a digitalized version of the currency let's go to the next video question from the next question from corey cooper uh columbia law school black voices on greater china hello my name is corey cooper i'll be attending the china town hall keynote program with ray dalio online my question has to do with the future of u.s china business relations general secretary xi jinping recently gave a foreign business friendly speech at the third china international import expo however given president trump's propensity for blaming china when questioned about the u.s economy and the desire of some officials and his administration to demonstrate their quote tough on china i wonder what your thoughts are on how likely it is that business relations could actually deteriorate rather than improve further between now and january 20th when trump officially leaves office thank you well um there's the question of the conflicts and then there's the date uh both are embedded in that question i think um there are five types of conflicts uh that exist with the rising power challenging and existing power um they are and we call them wars there's a trade war there's a technology war there is a geopolitical war um there is a capital war and then there is a military let's call it competition that you know could conceivably be into a military war uh they're all connected and they're um and because of the threats of those we um are having uh decoupalization uh taking place and and and which means the building of sort of self-sufficiency um and so that is going to be with us uh for a long time and how those conflicts are handled will uh matter a lot as far as the trump moves between now and the end of the year um regarding any actions with china i wouldn't expect my own guess is that there wouldn't be um any big developments uh that are that that would be traumatic or surprising um in in either side but you know i'm not the geopolitical expert who should be offering those uh comments as well as other people here but by speaking to many of those i would say i wouldn't expect between now and january 20th a significant uh developments in chinese uh american relations pertaining to the things you're asking about yeah we have to hope not so there were additional sanctions put on people in hong kong uh last night by secretary pompeo um let's go you mentioned technology let's go to a question on technology from nick young in san francisco hi everyone this is nick young in san francisco as the u.s china tech war intensifies both countries are pursuing separate models of global cyber governance with distinct values in ecosystems china may have initiated this process when it blocked facebook twitter and google more than a decade ago but now the united states has retaliated by issuing executive orders banning tick-tock and wechat with no positive turn in sight what would a technology decoupling look like and what would be the consequences um the technology decoupling um it's of course there's so many technologies and so many um applications but let's say at the big picture level um it certainly uh reduces the pace of uh development um and it um it puts um entities uh who are trying to juggle both um you know sort of on edge um it um um it means my opinion it sets back development particularly in the united states in in some ways in china um let's let's deal with that privacy issue um it is technologically a fact that the more data you have um and the the more uh artificial intelligence is applied to that data um the better you can understand and uh manage things so uh from a uh competitive point of view i think um it's a desirable thing uh to have the kind of uh massive collection of data i've heard just just different numbers eight times as much data per person and so on and of course the other side of that is the privacy side um and well you know each person comes down where they want what is the uh benefit of of that privacy in china um it's most people um view that as something the that absence of privacy is something that brings about uh the better security and a more civil society in the united states we value personal uh privacy issues i'm not going to get into that but from an efficiency point of view um it's you know contrary uh to efficiency when those technologies are decoupled um and it also um is somewhat of a disadvantage technologically um to have more uh holding of data private than to um use it in a broader way raises the question of reciprocity though that facebook google youtube twitter uh have been blocked in china for a number of years now and and wechat and tick tock and other chinese social media apps are able to operate in the united states how do we resolve that question in other words it's there's a there's a sense and you've i heard this a lot from the trump administration i'm i oppose the the wechat and uh and tick-tock uh bans in the united states however the response from the trump administration is it's not fair because we can't operate similarly in china um i think um i think everybody has to look at what the bigger picture what are the most important things in each country that won't be that'll be lines that won't be able to be compromised and there are different things in different countries um so you you're not going to get equal approaches or for example the privacy issue and google and so on um developing in china has to do with how information is managed in china that is managed in a way that's different from how it's managed in the united states and so reciprocity is not going to be something that you can develop policies on we're going to have the same reciprocity you could use them as negotiating so you i think you have to look at the you know what are the most important things in you know china and there's a certain government approach that doesn't have that same uh free flow of information particularly foreigners however we also there's a economic uh component of it too some countries are protectionists more protectionists and more protectionists in some ways than other countries so those are matters of you know negotiation um but they can't be approached like um you know that we can demand reciprocity with matters that are not equal for example uh the big issue for the china for the biden administration is the human rights issue um okay um that issue um is going to be then dealt with with a sovereignty question in china china would view um a human rights question as a sovereignty question uh should countries uh operating um outside there outside some of this jurisdiction assess and judge and exert pressure on how they should deal with with domestic affairs and so on so you have so how will that work out um there'll probably be a whole lot of arguing about that and then it'll come down to you know who has what power at the end of the day this whole thing's going to come down to who has what power and that's why i think we almost in the united states the important most important thing is focusing on how we can get stronger but anyway those issues won't be resolved by um expecting though we we do it and then they'll do it too see but the problem we have because we're dealing you know obviously i'm dealing with the congress dealing hopefully with the new biden administration is when they're violations of what are universal values this isn't a question you know that it becomes extremely difficult to persuade the congress the american people that we should even be dealing with them on a lot of these issues so when you talk about reciprocity people just go well it's just not fair it's just not fair we shouldn't be allowing that and the argument the chinese make with respect to facebook google youtube twitter actually doesn't hold water it it's exactly what you said in the second part it's protectionist it's economic protectionism it's not truly national security and if china is not willing to enter into discussions on these kinds of issues it's going to be really tough to get to a constructive relationship well um i think the problem is that um different people uh have different views about what is fair and in the reality of world affairs is that those interpretations don't matter really much in international relations maybe unfortunately but maybe fortunately because if different people have different views of what's fair maybe you can't get there and the only thing that really matters are relative strengths relative powers uh because it's a negotiating um thing and so um you know it's very interesting um in the history uh the united states um really starting under wilson woodrow wilson was the first country in history to view that the relationships between countries should be analogous to the relationships that we want to have between people within countries in other words he viewed that the united states as a democracy and that um the way people should be with each other should be a model for world governance and that's why he formed uh the league of nations and the league of nations failed and the united nations failed and after it so there's not a world organization there's not a world court to adjudicate differences so for example when if you say that um you know the world uh wants um um let's say that human rights issue and so on i would suppose if the world uh signed an agreement and agreed by and had enforceability so that um they were that then you could bring them to the to the world court and resolve that um and uh let's say on the issue of wto uh china brought issues of wto uh to the wto and um certain things were decided in its favor certain things are decided against it but the wto is in not a governing institution and it doesn't work and neither does the united nations and because power is where it comes down to so americans have gotten used to comfortably used to having their way and deciding that okay that's fair that's not fair and so on be as an extension of the power that we had as a result of you know 1945 we created a new world order the united american world order and we had power economic and military power and so we really got to judge others and determine what was fair i think that um you know we're not going to be able to resolve that and if we keep looking at it that way we may not get what we want i think we have to look at it realistically i think the byte administration is going to look at building coalitions and to the extent that a country is perceived as a violator of international law it will be much easier to build the coalition against the behavior that was a violation of international law if you look at the ruling under the convention of the law of the sea which was against china in favor of the philippines it put a lot of pressure on china to modify its behavior because it does not want to be perceived as a violator of international law by other countries especially by the asean countries who were involved so let's go to some of the the cooperative um aspects of the relationship but a question on climate and health from benji written hi there my name is benji renton and i'll be attending china town hall in middlebury vermont this year and my question is what do you see is the most important area for the us and china to collaborate on science and research and how can these two superpowers learn from coven 19 and work together to prevent the next pandemic well i i think uh that's a great question and there's tremendous opportunity for cooperation and you know it it almost goes back to ping-pong diplomacy but the idea of dealing with climate change that's a common interest um uh not only this pandemic but uh global health issues um just the re-establishing communications and looking for areas of cooperation i think would go a long way to improving um the psychology and and demonstrating the win-win potential of those relationships let's go on to uh society and culture um you know the committee's been doing a lot of programming on kind of anti-asian bias in the united states and you've written extensively about a persistent anti-china bias um many of these subtle prejudices have come out in the open in the past year um how pernicious do you think this threat is and how do you become more empathetic with our cultural differences and yet hold firm to our values um again i'm like a mechanic not an i don't have an ideology pertaining to this is just a mechanic um anger traditionally comes uh racism um demonization uh across classes um comes during periods of uh economic distress and um so we see it here in the united states um a number of statistics that could show is um that the majority of republicans and the majority of democrats actually hate the other side um and and so um whether that's uh rich poor racial um geographic all of those uh prejudices sort of come out particularly then if you have an opponent the idea of demonizing the other side in pursuit of good versus evil is the way that normally happens um so um we're seeing that happen now uh what does that mean i mean i don't think it's a good thing i think it's you know understanding um having contact with each other it does a world of good in all of those cases for um you know the communications understanding it helps people understand each other uh so i'm you know but i don't think uh what can be done i um i think whatever propaganda um or views are largely going to be extended by the leadership and the media um so um it's quite often the case that when a country has problems um they try to bring it together by finding a you know an enemy on the outside it would go a long way um if um president biden uh said something nice about china and the chinese or or the potential of working together and it would be very nice if uh president xi reciprocated and they took some actions along those lines and then there would be you know hopefully a a change in the meme in terms of those kinds of things uh but it's a symptom of our times i think yeah i i fully expect the body administration to take action uh against anti-asian bias that they will make statements they'll revise visa policies that relate to really ethnicity they'll end the muslim ban they'll reform they'll revise uh visa policy towards chinese students they'll revise h1b uh policies i expect that they will do that because they've really i think the asian-american community came out strongly for uh for president-elect biden at the same time i'm you know i expect that'll be the case and i hope so at the same time these deep-seated prejudices about even the scenarios that are underway are um there's a percentage of a population a large percentage um that nurtures those yeah and i think we need to you know transparency and light is a great disinfectant um and we need to make sure that you know that does not shape uh the formulation of american policy i believe the challenge though on that um is also the media um the media when put together with politics um you know it's it's nice for us to say but it's difficult to uh get that kind of light shown on um yeah yeah i mean i i think the media is actually pretty good in this respect you know we've seen the media you know a chinese-american correspondent working for cbs called out in a white house press conference in what to me was one of the more shocking events over the last four years um let's go to a question from blake moss in kentucky my name is blake moss and i'm from lawrenceburg kentucky my question is why should people from small towns in kentucky and other places across the south even care about u.s china relations how does it affect them in their daily lives thank you for taking my question good question um well uh it's affects you certainly economically um a lot of the uh goods that you've uh that you buy um at relatively low prices uh have been produced in china and so that affects you in that way economically and of course their competition has affected jobs certain types of jobs that have moved to china and that have left the united states and so that has an effect on you and then of course um uh what happens to our money uh the value of our money um its purchasing power uh is affected by what happens in the united states and what happens in china and then of course um then there are there's this great uh geopolitical struggle which might or might not affect you depending on you know how what what transpires um you know hopefully uh that won't affect you and so you'll hear about all the struggles in the south china seas and so on and maybe that won't matter but the technologies you use the cost of the goods that you um have to buy um the jobs and so on are affected by a lot by chinese american relations is it fair to conclude ray that that you think the greatest enemy of america is itself and the greatest enemy of china is itself yeah and if so kind of give us a sense of why and what that means for policies well because um it's an all of this is a natural extension of strength and well-being and so those eight measures that i mentioned before are the fundamental underpinnings of strength you know the quality and extensiveness of education this is the civility of the people um then the development of resource allocation systems such as our capital markets allocation system um our ability to produce things at competitive way rates our ability to then earn more than we spend these kinds and the development of a military that keeps you strong and protects you all of those things those fundamental strengths through all history through all time have been most important in determining the well-being of um of countries and so we rise and decline based on those so for example if we threaten the world the reserve currency status let's say nowadays we're gonna have to produce a lot of debt i go through the calculations who will buy that debt americans don't have enough capacity to buy that debt all that debt they have to sell it to others outside the world at the outside world those others already own too much of it and they're a little bit worried about what the return on that's going to be um americans even on bonds but pension funds endowments don't think that bonds are going to give them the returns that they need in order to be successful if you don't buy the bonds and so on then you're going to have to um not buy more than you can afford to buy and all of that so these basic fundamental underpinnings are what makes uh a place strong competitive in the world makes it currency strong and competitive in the world to encounter others in the world that's just basic we're out of time so let me just close with the question with chinese media and american media ask me all the time which is are you pessimistic or optimistic about the future of u.s china relations i'm i'm more optimistic than pessimistic uh it won't come the exact way that i would want it to come and i guess it depends you know on how long it'll be but i think um if both countries are allowed to evolve albeit with the risks um then it'll be fine the thucydides trap example is a good example in the last 500 years there were 16 times where rising power challenged an ex existing power in 12 of those times they had military wars uh that would be a disaster and in four of those times they didn't if we can look at those times that they didn't and the need for overwhelming um and recognize and remember history remember how terrible those are and how how good win-win relationships are and we can evolve without those kinds of things which i think is most likely it's the most sensible thing to do then we will both evolve we'll evolve and we'll evolve together probably uh with uh arguments but um it'll be okay that is an optimistic scenario for me and i very much hope that by administration hears that and we can work towards achieving the optimistic scenario you know my answer is always it depends on what the chinese government does it depends on what the us government does and it depends on the people the people relationships that are so strong and hopefully will get stronger thank you ray for such a wonderful thoughtful thought-provoking conversation and thank you all in the audience for participating in the first night of the national committee's 2020 china town hall series we hope you will also join us for the rest of our china town hall programming with our next program coming up on thursday more information including program registration can be found on our website at ncuscr.org cth thank you again for joining us and have a wonderful day [Music] [Applause] [Music] [Applause] [Music] you

Channel: National Committee on U.S.-China Relations

Views: 81,344

Keywords: Ray Dalio, Dalio, Investment

Id: GucGntiKux4

Length: 63min 56sec (3836 seconds)

Published: Tue Nov 10 2020