China Appears More Competitive Than US: Dalio

Javier E. David|Special to
Ray Dalio, Founder, President & CIO at Bridgewater

The emerging debate over the health of China’s economy demonstrates how the world’s second largest economy is actually more competitive than the U.S., well-known hedge fund manager Ray Dalio told CNBC Friday.

The founder and co-chief investment officer of the world’s largest hedge fund, Bridgewater Associates, likened China to Japan in its economic heyday.

“Years past in Japan when it was going strong, they called a recession anything less than 3 percent growth,” Dalio told CNBC’s “Squawk Box,” in an interview. “In China, anything less than 6 percent growth is a recession meaning it also...causes a lot of financial problems. It's disruptive and it's a problem.”

China's Troubles Continue to Plague Investors

A spate of economic data suggests China’s normally resilient economy is succumbing to weakness across the global economy. The U.S. and Europe—China's two largest trading partners—are fighting sluggish growth with more central bank stimulus, while public deficits continue to rise.

Dalio suggested that Beijing’s efforts to sustain economic growth above 7 percent contrasted sharply with the U.S.’s seeming acceptance of relatively stagnant growth.

“The fact that [China] can have 6 percent growth and think that's depressing, and we can have 2% growth and think that's pretty good, is a reflection of the difference in our competitiveness,” the legendary investor said.

Recently, the Shanghai Composite Index tumbled to its weakest level in more than three years after data showed China's manufacturing sector fell into recession.