Getty Images / Roy RochlinRay Dalio, a Friday statement from Ray Dalio, said that Beijing's crackdown on its technology economy should not alarm investors.He said that China's tightening policies were aimed at steady growth of capital markets, and entrepreneurship.He said that one should include both US and Chinese equities in his portfolio.Subscribe to our daily newsletter 10 Things Before The Opening Bell.Ray Dalio, a billionaire investor, said that he's not worried about Beijing's regulatory crackdown on tech stocks such as Didi. He argued that the government's actions don't signal a change in long-standing policy trends.He supported China's recent decision to tighten its control over data collection and usage from all sectors of the technology sector. In the wake of the clampdown by the government, some Chinese stocks experienced their sharpest declines in 2021."China is a capitalist state system. This means that the state controls capitalism to serve most people's interests and that policy makers won’t let the sensibilities of those in capital markets and rich capitalists stand between them and doing what they believe will be best for most people in the country," Bridgewater Associates founder and co-chief wrote in a LinkedIn posting on Friday.Dalio believes that the US and Chinese markets offer both opportunities and risks, despite recent jitters. He also believes they are capable diversifers.Dalio stated that both should be considered important components of one's portfolio. I urge you not to misinterpret these types of moves as reversals or changes in trends that have been around for several decades. Don't let that scare your away.Didi Global shares fell 10% from their IPO price in July due to news that Chinese regulators were considering severe penalties for the company. After the company ignored warnings and continued with its market debut, Didi Global was under fire for its failure to comply with data security investigations.The selling was likely due to fears that Didi could be delisted by the government and the expectations for what the future holds for the sector. Bloomberg reports that losses in Chinese education stocks and tech stocks have surpassed $1 trillion.The Securities and Exchange Commission stated that US-listed Chinese companies must disclose any potential government intervention risks. This was in response to market reactions. China's regulator has asked the SEC for assistance in the matter. This is seen as an attempt to calm investor anxiety.He said that a rapidly changing regulatory environment can make it difficult for Westerners to believe that the Chinese authorities are serious in using capital markets to support their country's development. According to Dalio, these people misunderstand the government's actions as anti-capitalist.He said, "Don't misinterpret those wiggles to mean changes in trends, but don't expect this Chinese-run capitalism not to be exactly like Western capitalism."These misunderstandings can also lead to shifts in geopolitical stances, as shown by the US freezing IPO listings of Chinese companies according to the hedge fund manager.Dalio admitted that it was unfortunate that Chinese policymakers didn't share the reasons behind their actions more openly.Continue reading: Chinese stocks are plummeting. Here are some reasons why the financial meltdown in China could be worse.
