Billionaire investor Ray Dalio explains why he's still investing in China despite a '100-year storm' looming

"The time to buy is when everyone hates the market and it's cheap (which is now the case in Chinese equities)," Ray Dalio wrote on LinkedIn.

• Ray Dalio still considers China to be worth investing in, he said in a LinkedIn post on Monday.
• It follows another recent post where he forecasted a "100-year storm" if policymakers don't act.
• He says the best time to buy Chinese stocks is when they're cheap and "everyone hates the market."

Now is the best moment to invest in China, even with the country on course for choppier waters, billionaire investor Ray Dalio wrote on LinkedIn.

"I have invested throughout many cycles in many countries and learned the adage 'the time to buy is when there is blood in the streets,'" he said. "The time to buy is when everyone hates the market and it's cheap (which is now the case in Chinese equities), especially when it looks increasingly likely that the economic leadership is about to do something like a 'beautiful deleveraging.'" 

The Monday post followed up on an earlier piece from Dalio, warning that a "100-year storm" could cloud over China, if Beijing didn't counter some key challenges. Those included a rising wealth gap, mounting debt, and geopolitical strain with the US.

Such issues have been top of mind for investors over years now, made hard to ignore by China's debt-burdened property market and trade clashes with the West. Many have fled the country's equities in droves, and Chinese firms have suffered a $7 trillion market hit since 2021.

But Dalio argues that they're manageable problems, as long as Chinese leaders are "smart and courageous," he wrote. Already, the country's policymakers are pursuing quantitative easing and debt restructurings, he noted, deleveraging actions Dalio suggested in his original post. 

"Like all countries throughout history, they can restructure the financial system economy to be productive.  They can also manage how to deal with political, geopolitical, nature, and technology forces well," he now wrote.   

Although Dalio didn't write off investor concerns about ongoing conditions in China, there are still good investments to snap up if focused on fundamentals, he said. Meanwhile, emerging concern over China's political structure or its tension with the US aren't strong enough to pull out of its markets.

"I can't diversify as well as I'd like to without investing in China. For example, China and the US are the only dominant powers in the most important industries and how these two nations are with each other will shape the world," he said, citing that the nation will remain a core position in his portfolio.