George Soros is no stranger to the media spotlight for his economic analysis and predictions. As an incredibly successful investor and philanthropist, George Soros has had more than his fair share of success in analyzing trends in currency markets and hedging his bets against anticipated currency market fluctuations. As of 2014, Forbes listed Soros as the richest hedge fund manager and as the seventh richest American individual. As the founder and chair of Soros Fund Management, Soros has made quite the mark by making sound investments and having an in-depth understanding of international markets. In reaction to the economic crisis in the U.S. of 2007 and 2008, Soros established the Institute for New Economic Thinking in 2009 as an economic think tank with the goal of analyzing international markets and proposing cutting-edge solutions for reorganizing the international economic system.
Given that Soros is so highly regarded for his take on international markets, his recent prediction about the economy of China is causing the international community to reconsider its position on the Chinese markets. At the beginning of this year at an economic forum in Sri Lanka, George Soros explained that the current status of the Chinese economy is serious cause for concern about its stability and potential for total collapse very soon. In a very troubling announcement, Soros says that he is seeing the same indicators of a major collapse in China that were present for the U.S. economy before the crisis of 2008. Bloomberg reported on Soros’ predictions, which he explains are based on various factors, including the fact that the Chinese economy is struggling to adjust to a new growth model. In the past, the economy of China was heavily based on manufacturing and investment. The country was previously viewed as a haven for cheap labor and very attractive to investors who valued the economic potential in manufacturing. Now, China has become more of a consumer-driven and services economy, which is a much different path than it had previously embraced. The transition has not been smooth in general for China and continues to encourage instability in Chinese markets. As a result of increasing uncertainty surrounding the future of the Chinese economy, measures of volatility are on a steady incline for the country.
Read more news about George Soros:
George Soros Sees Crisis in Global Markets That Echoes 2008
George Soros | Open Society Foundations (OSF)
The Capitalist Threat
Billionaire George Soros funds $15m effort to stop Trump, mobilize Latinos
According to Soros, the measures from the Chinese government to bring stability to the Chinese economy are not amounting to much so far. Interest rates have already been cut to record lows, and the Chinese government has pumped an incredible amount of money in the economy to try and save it from collapse. While Soros generally thinks government intervention is necessary to correct major market upsets like this, the influx of government money may not be the best policy, especially in light of the country’s mounting debt problem. Soros and other global investors are expressing some concern that the country does not have a sound strategy to pay down debts and decrease spending in order to get the economy back on track to a normal, steady growth model.