Ray Dalio expressed deep concern about China's property crisis, drawing parallels to Japan’s asset bubble collapse. He emphasized the need for a debt restructuring due to local governments' inability to service debts.
Dalio remarked, 'It's a situation which is at least as severe as the Japanese situation starting in 1990.' He warned about the potential need for debt forgiveness that could affect creditors.
He noted that households, traditionally investing 70% of their wealth in property, are now reluctant to spend. This lack of consumer confidence is hindering economic recovery in China.
Dalio pointed out the complexity and political challenges of restructuring China’s debt, highlighting that the issues go beyond local governments and affect the overall economy.
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