Hedge fund titan says China's economy bottomed out

NEW YORK -- China' economy has already bottomed, but debt is a problem that should be paid high attention to, Bridgewater Associates Chairman Ray Dalio said on Friday.

"I think short term it has already bottomed in terms of data," said Dalio, the founder of the world' s largest hedge fund who oversees approximately $150 billion of assets, based in Westport, Connecticut, responding to a question from Xinhua about whether China' s economy is bottoming.

The latest manufacturing activity data from China showed that the world' s second largest economy is regaining momentum somewhat.

Dalio said the most important thing for China' s economy is to go through an adjustment and restructure different parts of the economy.

He praised Chinese leadership' s capabilities in recognizing problems and dealing with them in a balanced way, noting these problems "entirely manageable."

Dalio made the remarks shortly after delivering a speech to Japan Society based in New York.

He said in the speech that China has become an important force of the world and its debt level is lower than most other countries in the world.

But at the same time, he warned that there is also a debt bubble emerging in China. "A lot of that debt is financing investments that really do not produce the cash to service that debt. So we have an issue in terms of that weighing."

He said that China' s debts can be very well managed, taking into the account its resources and debt that' s nominated in local currency.

There still should be an adjustment to tackle the debt issue, he suggested.

Besides, Dalio said that emerging markets are facing some challenges, one of which is he thought they have unsustainable capital flows.

Dalio also expressed his concerns over France. He said the European country didn' t deal properly in reducing its debt ratio.