George Soros is the type of man you listen to when he speaks. That’s why all ears were open when he addressed attendees at the economic forum in Sri Lanka’s capital. During the forum, Soros spoke in great detail about the current state of the Chinese economy.
According to an article published on Blomberg.com, Soros pointed out the lack of a new growth model on http://www.nybooks.com/contributors/george-soros/ and the devaluation of currency as two of China’s biggest problems.
George Soros also pointed out that these problems aren’t just impacting the Chinese economy, but the world economy as a whole. While returning to positive interests rates is the ultimate goal, doing so has proven to be a challenge for the developing world.
It is these circumstances that have created an environment very similar to that of 2008.
The commodity market, the stock market and the global currency market all took major hits on http://latino.foxnews.com/latino/politics/2016/03/10/billionaire-smackdown-george-soros-funds-effort-to-stop-trump-mobilize-latinos/ during the first week of the year. The Yuan also continued to sink as China worked on shifting from an economy driven by investments and manufacturing to one driven by consumption and services.
To make matters worse, the value of global equities dropped by $2.5 trillion in just the first few days of the year. Chinese equities also took a big plunge which resulted in trading being halted for a day.
George Soros believes China has major problems with adjustment. And in his mind, these problems amount to a crisis. He was quoted as saying, “When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”
Measures of volatility is also a problem as it surged at the beginning of the year.
Fixing the problems in China won’t be easy. To get the ball rolling the Communist Party in China has agreed to increase the yuan’s convertibility by 2020. This of course is a huge step in the right direction. They have also agreed to dismantle capital controls over the coming months and years.
Who Is George Soros
George Soros is a billionaire who has been a huge supporter of democratic ideals and causes for close to 40 years. He runs Open Society Foundations, a philanthropic organization that supports human rights and democracy in over 100 different countries. Read his profile at Forbes.
The organization works to build vibrant and tolerant communities where the government is held accountable to the citizens.
To learn more about George Soros and the Open Society Foundations, visit www.GeorgeSoros.com.