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Ray Dalio isn’t right about China’s tech crackdown, financial expert says

China master George Magnus can’t help contradicting Bridgewater Associates’ Ray Dalio on Beijing’s tech crackdown.

In a LinkedIn post this month, Dalio said financial backers were confusing a clampdown by China on areas including fintech, web based coaching and food conveyance as “anti-capitalist.”

“The trend over the last 40 years has clearly been so strongly toward developing a market economy with capital markets, with entepreneurs and capitalists becoming rich,” the tycoon flexible investments director said.

“As a result, they’ve missed out on what’s going on in China and probably will continue to miss out,” Dalio added.

Magnus thinks Dalio is mixed up. The financial analyst, who is a partner at the University of Oxford’s China Center, told CNBC on Wednesday that Beijing’s crackdown is about the Communist Party’s quest for political “control.”

“I think Dalio is wrong,” Magnus told CNBC’s “Street Signs Europe.” “Obviously he’s got a big business in China, so he would say that, wouldn’t he?”

Neither Dalio nor Bridgewater Associates was promptly accessible for input at the hour of distribution.

Dalio has made various bullish remarks on China over the previous year. In October, he cautioned financial backers not to disregard China’s ascent as a monetary superpower. In the interim, Bridgewater Associates has been sloping up interests into China’s financial exchange of late.

Also, regardless of China’s investigation of its enormous tech area, Dalio is multiplying down. “Try not to confound these squirms as changes in patterns, and don’t expect this Chinese state-run free enterprise to be by and large like Western free enterprise,” he said as of late.

China’s Communist Party is “basically driven to control these tech firms and entrepreneurs, despite the fact that they are the essence of the dynamism of China’s economy,” Magnus said.

Business people like Alibaba originator Jack Ma and Tencent boss Pony Ma “supposed to support the party’s goals,” he added.

China’s transition to increase oversight of its tech industry started last year when remarks from charming tycoon Ma reprimanding controllers constrained Ant Group, the fintech subsidiary of Alibaba, to scrap its arranged first sale of stock.

Hypothesis mounted over Ma’s whereabouts after he vanished from the public eye for quite a long time. As indicated by partners, the business visionary is going underground. In June, Alibaba prime supporter Joe Tsai revealed to CNBC Ma was “doing well” and had “taken up painting as a hobby.”

All the more as of late, Beijing has stretched out its crackdown to a few different organizations. Ride-hailing firm Didi, which opened up to the world in the U.S. recently, has fallen 38% beneath its contribution cost on the rear of a network safety test from Chinese controllers.

Specialists have likewise designated private coaching administrations, food conveyance firms and the computer game industry.

“What we generally regard as growth stocks and growth companies … they won’t and they shouldn’t trade as growth stocks because they have been politicized,” Magnus said. “Capital is being politicized in China.”

“The valuation lurch that we’ve seen since February in many of the stocks in China is pretty permanent,” he added. “I don’t think that the valuations in China, a lot of the tech stocks, actually should be where they used to be.”

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