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George Soros Predicts a Hard Landing for China’s Economy

Renowned business leader and author George Soros has made a very important study concerning China’s Economy. He has made a notation that the current economy situation in China resembles that of U.S. right before the 2008 economic crisis. George Soros has warned that China may be heading into an economic crisis.

China’s Economic Situation

George Soros has been specific on the terms that made him pass this warning. He observed that the credit growth figures of China point to a downfall. China has experienced a surge of new credit last month. The country got 2.34 trillion Yuan which exceeds the expected the figure of 1.4 trillion. However, this surge in new credit for the country is a warning sign. This is because the higher than expected figure only shows that the country is focused on borrowing and increasing its debt rather than paying it.

George Soros said that China’s situation has resemblance to the U.S. 2008 crisis because of its nature of being ‘fueled by credit growth.’ He said, “Most of the money that banks are supplying is needed to keep bad debts and loss making enterprises alive.”

George Soros made a study of the banking system of China and pointed the similarities of their situation to the U.S. 2008 situation. One of the similarities is the huge accumulation of loans from the banks. The country’s banking system is the main reason why the economy might crash. This is because there are ‘more loans than deposits’. Soros explained that there was problem ‘on the assets side but also increasingly troubles on the liabilities side’.

What is currently sustaining the economy of China is the ability of banks to lend each other capital. However this capability is not a positive sign. Soros said, “Other banks have to lend to each other and that’s an additional source of uncertainty and instability”. However, since the country is deep in debt, this lending business can only last for 1 or 2 years.

The new surge in credit has favored the real estate sector. House values for new premises have gone high with an almost 62% rise compared to last year. However, this success reflects a similar situation in U.S. back in 2005/2006. This success may not last long but it may sustain the economy for some time.

Soros has pointed out the positive move of China too. He acknowledged that the country’s effort to link the Yuan to other currencies is great. According to Soros, this foreign exchange policy will greatly reduce the ‘threat of competitive devaluation’. The cooperation between U.S. and China serves to strengthen the market relations that had been on the downfall at the start of the year.

George Soros is a billionaire investor who is ranked among the richest people in the world. He has authored insightful books and articles. He is the founder and chairman of Open Society which funds charitable work in more than 100 countries.

Find out more about George Soros and China on:

The Global Market Might Face Another Financial Crisis

George Soros is a billionaire who was born in Hungary. He studied in the London when he had migrated in to. After completing his education, he decided to move to America, and this is where he worked hard to start his own company. George Soros started by being employed in some big companies in the country before he managed to start his own companies.

George Soros is the founder of one of the biggest companies in the United States today. The company is known a Soros Foundation on Politico, and he has invested in several other companies. Due to the success of the company, George Soros emerged to become one of the most influential and wealthiest people in the United States. He has earned a special and independent place in the society, and he has taken the decision to speak for the people who cannot do it in the American society and also in the world.

George Soros is an advocate of an open society, and due to this, he has started an organization to implement his objectives. The organization is known as Open Society, and it has spread like wildfire since it was started several years ago. The society helps many people across the world, especially individual who are weak and need support. The organization has helped students in South Africa to acquire education when the black people were being discriminated in the country during the apartheid.

Over the years, George Soros has acquired a lot of knowledge and expertise in the finance and political matters of most nations and his opinions not taken lightly. He was the person who predicted the financial crisis that occurred in 2008, leaving many investors in trouble. He also talked about the collapse of the European Union on, and several months later, the migration crisis started affected in.

Recently, George Soros told the press that the global markets in the world are facing a serious crisis, and the investors must be very careful in order to avoid getting serious losses. George Soros said this during an economic forum that was held in Sri Lanka.

In the economic forum, George noted that china, one of the developing economies was in the process of creating a new model of currency, and in the process, there was currency devaluation which was bringing problems to the rest of the nations in the world. Getting a positive interest rate in the developing world is not a walk in the park. He also added the current economic climate in the country is similar to the one that occurred in 2008.

When the year was starting, the international currency, commodity markets and stock were under attacks, and the yuan also proved to be sinking bringing more trouble in the world economy.

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