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Komfie Manalo, Opalesque Asia:

A day after "privately" telling its investors it has shifted its stance towards China from bullish to bearish, the world’s biggest hedge fund Bridgewater Associates has expressed confidence that China’s "debt and economic restructurings and more stimulative government policies" could offset the downward pressure on its market.

In a statement sent to Opalesque, Bridgewater clarified that the reports quoting its founder Ray Dalio as telling his investors that China has change in attitude towards China, was a private communication between the company and its clients.

"While the report to Bridgewater clients is a private communication which they want to continue to try to keep private, Ray Dalio and Bridgewater believe that too much has been made of the shift in their thinking and want to clarify their thinking," the statement said.

It added, "The observations that were made simply noted that falling stock prices have a negative wealth and negative psychological effect. When a classic stock market bubble (supported by unsophisticated investors buying stocks on a lot of margin) bursts there are negative growth effects. When combined with the debt and economic restructurings underway, that will most likely result in slower growth, and more stimulative government policies to offset these downward pressures.

"Bridgewater's view that China faces debt and economic restructuring challenges, and that it has the resources and the capab......................

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