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Daily Mirror
Daily Mirror
World
Charlie Jones

US and China are on the brink of war and red lines will be crossed - warns billionaire

The world's most powerful countries, US and China, are on the brink of war, a billionaire investor has warned.

Ray Dalio, who made his fortune investing in China, said that the two are on the brink of crossing each other's red lines and are beyond the ability to talk.

Mr Dalio wrote on LinkedIn: "The United States and China are on the brink of war and are beyond the ability to talk."

He runs the biggest foreign hedge fund in China and has been going to China for nearly 40 years. He outlined his thoughts, drawing on experience of meeting with policymakers and China experts from around the world.

Mr Dalio suggested President Biden could still wind down tensions (Getty Images)

He said despite knowledge they need to avoid war, "there is growing belief that the unavoidable trajectory is toward war," Mr Dalio said.

The key flashpoints that could escalate tensions are disputes over Taiwan, confrontations between US and Chinese ships and planes, the war in Ukraine, and threats of economic sanctions, he wrote.

He also warned about the coming 2024 Presidential election in the US.

"The hawkish political influences in the United States will exert more pressure on the relationship over the next 18 months because of the emergence of the 2024 election season," Mr Dalio said.

Mr Dalio has been working in China for 40 years (Getty Images)

"That will be a very risky period because China and the US are now already on the brink of war."

Despite his fears he did have a message of hope.

He added: "I want to emphasise that by saying that they are on the brink, I don’t mean to say that they will necessarily go over the brink."

He also emphasised some steps to de-escalate including President Biden hosting President Xi in San Francisco at the November APEC meeting.

Mr Dalio said: "Have all parties make clear that peace is better than war.

"That working on agreeing on ways to reduce the probabilities of having the worst types of wars is a top priority, and that gradually building agreements to reduce the progressively less bad types of conflict would be the best path."

Ray Dalio attends the 2022 Forbes Iconoclast Summit at New York Historical Society on November 03, 2022 (Getty Images)

Tensions between US and China ratcheted up earlier this month when House Speaker Kevin McCarthy welcomed Taiwan’s President Tsai Ing-wen for a historic meeting on US soil.

The meeting on April 5 was the first known meeting between a House speaker and a Taiwanese president on American territory since the US broke off formal diplomatic relations with Taiwan.

China views any interaction between U.S. and Taiwanese officials as a challenge to its claim to the island as its territory.

The United States broke off official ties with Taiwan in 1979 while formally establishing diplomatic relations with the Beijing government.

In October last year President Xi Jinping blasted "external forces" including the US for rising tensions in Taiwan and warned he may take the independent island by force.

The Chinese leader, 69, made the comments during his opening of the 20th congress of the ruling Chinese Communist Party (CCP) in Beijing.

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