Dalio is warning about possible aftermath of “more intense” tensions between China and the U.S.

American billionaire investor and hedge fund manager Ray Dalio spoke out on the current relationship between the United States and China. As he noted, the world in general and activity in particular is hugely affected by the awareness of possible increase in escalation between the two countries.

Dalio shared his views on the matter after a meeting the US and Chinese leaders had on the sidelines of the G20 summit in Bali on Monday.

As it was stated by Dalio, he got information concerning “some possibility” of passing a bill that supports the independence of Taiwan by a new House now managed by the Republicans. This will highly likely do serious harm to the relationship with China.

Dalio added that the current tensions are one of eight most prominent challenges the future leaders of China would face that creates a “dangerous storm” for them. The group of country leaders will possibly have more common views and opinions under Xi. They will probably demonstrate power more often, as well as provide more support for economics under the state control than for free markets.

Another important difficulty mentioned by Dalio lies in China’s real estate and debt problems, which are already deeply rooted in the country’s economy. As it was noted, even if the right steps are taken, it will take about two or three years to achieve the necessary results.

Covid-19-related issues are still persistent, too, remaining a notable challenge for China, especially with such facts as under-vaccinated elderly and shortages of medical resources being taken into consideration.