Dialogue with Ray DALIO—Development and Cooperation in the New World Order

Ray Dalio, Founder of Bridgewater Associates, and Jiandong Ju, Unigroup Chair Professor at PBC School of Finance in Tsinghua University, sponsored a roundtable discussion on “Development and Cooperation in the New World Order.” The discussion began with Mr. Dalio's notion of the Great Cycle, which states that each dominating country in history has its own cycle. The changing process of dominant country consists of a competition sequence: trade competitions, tech competitions, capital competitions, and military competitions. As military technology has improved dramatically, the ability to hurt human beings has increased more than ever. If the two competing countries reach the prisoner's dilemma, each will be motivated to destroy each other because we fear being destroyed by the other. To avoid armed war, we have to be fearful of war, to be concerned about that, and hopefully, that level of concern could put avoiding it above everything else. Jiandong Ju expressed his understanding in changing world order that a country must be strong enough to replace the former dominating power, for example, by accounting for half of the world's GDP. Throughout history, the Netherlands was replaced by the United Kingdom, and the United Kingdom was replaced by the United States. However, the OECD predicts that by 2060, China's GDP volume would only account for 25–28% of global GDP. Even if China's total economic volume exceeds that of the U.S., it will no longer be a hegemonic state in the same way that the U.S. is. A paradigm shift will occur in the change of the world order, with no more change of major powers, and the hegemonic dominant model will be replaced by the coexistence of several major economies including China, the U.S., and Europe. Both Dalio and Ju believe that in the new international order, China and the U.S. should compete in an orderly manner, avoid conflict, maintain conversation, and collaborate on economic development and technological innovation to achieve win–win situations.