George Soros, who is a billionaire investor, pointed out that the economy of China, which is fueled by debt on https://en.wikipedia.org/wiki/George_Soros, is similar to that of the US during 2007/08 financial crisis, prior to the halt of the credit markets that spurred global recession.
During an event on Asia Society that was held in New York, George Soros said that Chinese credit-growth figures for March were to be warning signs. The second-largest economy in the world exceeded its median forecast by 1 trillion yuan in March. This signaled that the government is giving growth priority over reining in debt.
Soros said that whatever is happening in China is a resemblance of what had happened during the US financial crisis of 2007/08 that was in a similar manner fueled by growth in credit on http://www.nybooks.com/contributors/george-soros/. Most of the money supplied by banks is necessary to shun bad debts and keep loss-making enterprises alive.
George Soros was able to build a fortune of $24 billion through understanding wagers on markets. In January, during a World Economic Forum, he said that he has been betting against the Asian currencies since a ‘nose dive’ in china is in real sense unavoidable. The Chinese government did not meet his remarks positively, and they rebutted his assertion claiming that he has been making similar predictions in the past.
Soros said that the banking system in China is full of loans than deposits and not only does trouble lie on the assets side on http://www.georgesoros.com/, but there are also increasing troubles on liabilities side. Since other banks will have to lend one another, that is an extra source of instability and uncertainty. This problem has been postponed and it is possible to postpone it for another year, but it is growing and at an exponential rate.
The Chinese economy gained pace in March as surge in new credits helped property sector rebound. The housing values in high-cost cities have ascended, with prices of new homes in Shenzhen rising by 62% within a year. According to Soros, while the real estate industry in China may be in a bubble, it still has the potential to thrive for some time, just like in US in 2005 and 2006.
Read more about this: George Soros Gives his Views on the Future of China’s Economy
George Soros, born in 1930 in Budapest, started Soros Fund Management LLC, which he currently chairs. Being one of the most successful financiers in history on http://www.investopedia.com/university/greatest/georgesoros.asp, his views on economic issues and investing are widely followed.
Following his success in investing, Soros established the Open Society. The society is made of a network of foundations, projects and partners in over 100 countries. His staunch commitment to the ideas of open society; where government is accountable, rights are respected and everyone has access to the truth, is what makes Open Society Foundations to stand out unique from other private philanthropic efforts.