The backstory:
- There’s this thing called the Thucydides Trap, which is the idea that when an upcoming power threatens the position of an existing power, the countries tend to edge toward war.
- For some, that dynamic is playing out now between the United States and China through a cold war.
- It is a situation that has also divided high-profile investors like Warren Buffett and Ray Dalio. While Warren Buffett is incredibly optimistic about the US, Dalio believes China is the future.
- In February of last year, Buffett said in his shareholder letter, “Despite some severe interruptions, our country’s economic progress has been breathtaking … Our unwavering conclusion: Never bet against America.”
- On the other hand, Dalio may not be as well known, but he’s the founder of the world’s biggest hedge fund firm, Bridgewater Associates LP.
- Dalio, who has a net worth of around US$15.7 billion, praised China’s common prosperity drive earlier this month and urged nations to work on wealth inequality.
- In May 2020, billionaire investor Ray Dalio wrote in his essay series that “The United States is now the most powerful empire by not much, it is in relative decline, Chinese power is rapidly rising, and no other powers come close.”
The development:
- A wide-ranging David Rubenstein interview with Dalio is scheduled for broadcast on February 2. And in a sneak peek of the interview, Dalio said that the US is in “relative decline,” while “China has been rising.”
- “There is a worry that one should have about the divisiveness and what it means for each other.”
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