Beijing, China. Bridgewater Associates was skeptical about investment opportunities in the country
Author: Tom Bailey
July 24, 2015
The “world’s largest macro hedge fund” Bridgewater Associates expressed skepticism about the future of the Chinese economy. Speaking to clients, the hedge fund founder Raymond Dalio said, “Our views on China have changed,” reports the Wall Street Journal. “There are no safe places to invest now.”
The Chinese stock market has been falling since June 2015
Dalio says the recent stock market crash in China will negatively impact the country’s economic growth. The Chinese stock market has been falling since June 2015. After peaking in June, prices fell nearly a third, causing $ 3 trillion to be withdrawn from the market.
The effects will be long-lasting and widespread, says Dalio: “Even those who have not lost money in stocks will be psychologically affected by events, and those effects will be depressing to economic activity.”
Despite the intervention of the authorities and the worst of the crash, many foreign investors are pulling out of China, as shown by the “latest report on the ANZ / EPRF cash flow … for the past week ending July 22,” reports Business Insider.
Another bad news for the world’s second largest economy is the Caixin Flash China General Manufacturing Purchasing Managers Index. The index, an “indicator of the operating conditions of the manufacturing sector in China,” showed that the Chinese factory sector declined more sharply in July than in the past 15 months due to a decline in orders and production. These figures cast doubts on the official Chinese statistics, which put GDP growth of seven percent and the accuracy of which has already been questioned.