Selling His Fellow Capitalists the Rope With Which Communist China Will Hang Them

Selling His Fellow Capitalists the Rope With Which Communist China Will Hang Them
Ray Dalio speaks onstage during TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center in San Francisco, California, on Oct. 2, 2019. (Kimberly White/Getty Images for TechCrunch)
Thomas McArdle

Envision a country in which “the state runs capitalism to serve the interests of most people” and our politicians won’t let “rich capitalists stand in the way of doing what they believe is best for the most people of the country.”

That sounds a lot like Sen. Bernie Sanders or Rep. Alexandria Ocasio-Cortez describing their far-left ideal for America. It’s not that far removed from the Marxist maxim that predates Karl Marx himself of “from each according to his ability, to each according to his needs,” and it goes completely against the free-market principles that drive successful investors and entrepreneurs in the Land of the Free, right?
Except that this observation was written earlier this year by the multi-billionaire founder of the world’s largest hedge fund, Ray Dalio, co-chairman and the driving force of Bridgewater Associates based in Westport, Connecticut—one of the most trailblazing and innovative money managers in the history of investment finance. And the state-run capitalism to which he referred is that of communist China, which Dalio is more bullish on than anybody.
Dalio’s drive and talents are legendary, and his life story of launching Bridgewater out of his two-bedroom apartment in New York City two years after graduating Harvard Business School nearly a half-century ago is the stuff of the American Dream.

But recently on CNBC, far from celebrating America, Dalio was all moral equivalency as he analogized Beijing’s persecution and torture of its own people with “our own human rights issues” in the United States. He asked rhetorically, “Should I not invest in the United States?” on the basis of human rights.

“What they have is an autocratic system,” Dalio said of Beijing’s rule, “and one of the leaders described it, he said that the United States is a country of individuals and individualism,” while “in China, it’s an extension of the family” and the internal abuses of the Chinese government that disturb Americans are comparable to the discipline of “a strict parent,” according to the Chinese governmental official Dalio was quoting.

Dalio’s remarks come after Bridgewater raised $1.25 billion for its largest China fund yet, according to The Wall Street Journal. It’s worth noting that nearly 59 percent of Bridgewater’s $223 billion in assets belong to non-U.S. clients, according to its required disclosures to the U.S. Securities and Exchange Commission earlier this year.
Since 2018, Bridgewater has had its own active subsidiary based in Shanghai; the firm’s only offices, other than its Connecticut base, are located in mainland China. Many of his clients are “high-net-worth individuals and institutional investors in China.”
Worse still, The Wall Street Journal discovered that Dalio’s new fund is actually “a trust product overseen by state-owned China Resources Trust.” No shock there, since for years Dalio has been managing billions owned by Chinese entities—and even by the Beijing regime—in investments outside China.
To say that Dalio is a confirmed Sinophile would be a gross understatement. He has visited mainland China many dozens of times, studied Chinese culture, and modeled some of Bridgewater’s business culture after practices encouraged by Mao Zedong during China’s Cultural Revolution, according to current and former employees. He even had his son, at age 11, spend a year living with a Beijing family after getting “special permission from the Chinese government,” according to Dalio in a soon-to-be-published autobiography.

Dalio has spoken to the annual China Development Forum, which requires a six-figure donation to the Beijing government to attend, founded the “Beijing Dalio Public Welfare Foundation,” whose mission is “to contribute to a harmonious society,” and there is an auditorium named after him within Beijing’s historic Tsinghua University.

Tsinghua was founded in 1911 at the behest of President Theodore Roosevelt after the suppression of China’s Boxer Rebellion, originally as a prep school for Chinese students chosen to study in the United States.

 Two men ride bikes on the empty grounds of Tsinghua University in Beijing on Feb. 28, 2020. (Greg Baker/AFP via Getty Images)
Two men ride bikes on the empty grounds of Tsinghua University in Beijing on Feb. 28, 2020. (Greg Baker/AFP via Getty Images)

Dalio’s deep knowledge and familiarity with the Chinese have paid off big. Bridgewater’s China subsidiary has delivered a dazzling 19 percent average annual return over its three years of operation, significantly exceeding the 16.3 percent of mainland China’s CSI 300 index over the same period. Obviously, there is serious money to be made in the soon-to-be largest economy in the world.

But those mounds of cash are soaked in the blood of many thousands of China’s own people. The Muslim-dominated far-west region of Xinjiang, after riots in its capital city, Urumqi, in 2009, has been subject to a mass persecution and incarceration without trial of its ethnic Uyghurs. The region is rich in fossil fuel resources and borders several countries strategically important for Beijing’s expansionist Belt and Road Initiative.

Eyewitnesses have testified extensively to mass detentions, forced labor, coerced sterilizations and abortions, and even genocide as a means of eradicating Uyghur culture and religion. One European scholar calls Beijing’s forced ethnic assimilation in Xinjiang “the country’s most intense campaign of coercive social reengineering since the end of the Cultural Revolution.”

The Uyghurs, however, are only the most recent victims of communist Chinese persecution in the 21st century. Blind lawyer and activist Chen Guangcheng, for instance, was incarcerated for years and beaten for engineering a class-action lawsuit on behalf of victims of Beijing’s infamous one-child policy, finally fleeing with his family to the United States in 2013.

The regime has reneged on its promised “one country, two systems” approach to Hong Kong, clamping down on political freedoms in the former British colony, and Beijing’s air forces have been intimidating Taiwan since the weakness displayed by the Biden administration in the bloody Afghan withdrawal debacle. Expert observers now expect the regime to make a move to annex Taiwan sometime after the Beijing Winter Olympics in February 2022.

More importantly for those outside China who wish their children to enjoy the same political and economic liberties that have let them live prosperously, the Chinese Communist Party (CCP) has been executing global expansionist designs it has made no secret of planning.

As President Donald Trump’s 2017 National Security Strategy noted, “For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China.” Instead, Beijing “is building the most capable and well-funded military in the world, after our own. Its nuclear arsenal is growing and diversifying.” And much of “China’s military modernization and economic expansion is due to its access to the U.S. innovation economy, including America’s world-class universities.”
In 2020, a Pentagon report on China stated that Beijing seeks “to develop a military by mid-century that is equal to—or in some cases superior to—the U.S. military, or that of any other great power that the PRC [People's Republic of China] views as a threat.”
 A man walks among supersonic cruise missiles at the 13th China International Aviation and Aerospace Exhibition in Zhuhai in China's Guangdong province on Sept. 28, 2021. (Noel Celis/AFP via Getty Images)
A man walks among supersonic cruise missiles at the 13th China International Aviation and Aerospace Exhibition in Zhuhai in China's Guangdong province on Sept. 28, 2021. (Noel Celis/AFP via Getty Images)

The Department of Defense pointed out that “China is already ahead of the United States” in shipbuilding, with “the largest navy in the world, with an overall battle force of approximately 350 ships and submarines” compared to the U.S. Navy’s “293 ships as of early 2020”; the PRC’s “more than 1,250 ground-launched ballistic missiles (GLBMs) and ground-launched cruise missiles (GLCMs) with ranges between 500 and 5,500 kilometers” outclass the United States’ “one type of conventional GLBM with a range of 70 to 300 kilometers and no GLCMs.”

The Wall Street Journal reported on Dec. 5 that according to U.S. intelligence, China plans a permanent military base in Equatorial Guinea, which would be its first presence on the Atlantic coast.

Nearly 20 years ago during a visit to Beijing, President George W. Bush was brimming with optimism as he spoke at Tsinghua University and said: “We see a China that is becoming one of the most dynamic and creative societies in the world. ... China is on a rising path, and America welcomes the emergence of a strong and peaceful and prosperous China.”

As the Trump administration recognized, America was all in on a fallacy that was accepted by most in the free world: that free-market freedoms and U.S. support for China’s rise would wean it toward political liberty and away from its expansionist designs. It took a long time for the world to wake up to the reality that the CCP has for decades been using an aggressively lawless form of capitalism to spread the global reach of its tyranny.

For one of America’s most famous and gifted capitalists to help Beijing overtake and subjugate America will go down as one of the strangest cases of short selling in history.

Thomas McArdle was a White House speechwriter for President George W. Bush and writes for
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