• Chinese tech and education stocks massively sold off last week after the country continued its crackdown on the tech sector, and stepped up restrictions on its education industry. 
  
• China’s recent regulatory crackdown has been misinterpreted as being “anti-capitalist” by some Western investors, who will as a consequence “continue to miss out” on what’s happening in the Asian country, says billionaire investor Ray Dalio.
  
• The crackdown on the education sector is actually an attempt to reduce inequality in the country, as costs spiral in the huge tutoring and enrichment industry, say analysts.
  

In a note on his LinkedIn account, Dalio said investors who think that way will “continue to miss out” on what’s happening in the Asian country.

He explained that he was referring to Western observers who have no direct contact with policymakers and “don’t follow in detail the patterns of the changes” by the government.

“They interpret moves like these two recent ones as the Communist Party leaders showing their true anti-capitalist stripes even though the trend over the last 40 years has clearly been so strongly toward developing a market economy with capital markets, with entrepreneurs and capitalists becoming rich,” Dalio said.

“As a result, they’ve missed out on what’s going on in China and probably will continue to miss out,” added Dalio, the founder of the world’s largest hedge fund Bridgewater Associates.