"China is going through a difficult stage of transition from the investment model of economy to the model acting on the basis of domestic consumption."
Everyone is trying now to understand what is happening with the Chinese economy. American businessman, billionaire, and founder of Bridgewater Associates investment firm, Ray Dalio, is no exception. He shared the opinion on this occasion in the interview with Bloomberg TV. "China is going now through some sort of a heart transplant. You can weaken before you start to feel good in the long run ... However, you have to go through it, if you want to be better tomorrow than today. I think that is the case." Dalio believes that this is an indication of that China is going to go the hard way, but eventually everything will end well. "China is going through a difficult stage of transition from the investment model of economy to the model acting on the basis of domestic consumption." The problem is that the country has to deal with a huge amount of debts and excess capacities in various sectors, which are vital to economic management processes. And it is essential to get rid of these debts. You do not have to face a debt growth." For the prosperity of the Chinese economy, it is necessary to restructure all these sectors. And it will be very sensitive, because it is huge state-owned enterprises. The philosophy of Chinese authorities is simple: the more, the better. And this situation is changing. Officials of the country have already made a statement that from 5 to 6 million people can be fired in the next few years. Dalio considers that Chinese authorities are competent enough to deal with this problem. "Yes, the authorities' behavior in the stock market has suffered a complete fiasco, but the people, who witnessed this, showed a complete lack of understanding of dread of the situation. There are good ways to manage such situations, and there are bad too. And the leadership is very important in such matters. "