The growth of debt in China, Soros recalled the situation before the crisis in the United States


Speaking at the event organized by the Asia Society in new York, Soros said that the situation in the Chinese economy, whose growth is fueled by new debt, “frighteningly” similar to what occurred in the U.S. in 2007-2008, when the threat to economies large debts, according to Bloomberg.

“A large part of the funds which give banks have to spend to cover bad debt and support loss-making enterprises”, — quotes Agency of a billionaire.

The investor in General spoke positively about the exchange rate policy of the Chinese authorities, noting that attempts to link the yuan to a basket of currencies — a more correct solution than binding of the RMB solely to the dollar.

According to the Agency, in March the volume of lending in China increased by 2,34 trillion yuan ($362 billion). This figure is one and a half times higher than estimates by economists surveyed by Bloomberg.

Soros in recent weeks has criticized the economic policies of the PRC government. So, at the World economic forum in Davos, said the investor that bets against the Asian currencies, because it considers “a hard landing of the Chinese economy is almost inevitable”. In response, the Agency Xinhua has published an article which indicated that such predictions Soros gave earlier and they didn’t come true.

In late January, the official organ of the Communist party of China, the newspaper “people’s Daily”, has accused Soros in an attempt to organize an attack on the yuan and Hong Kong dollar. The occasion was the presentation of the investor at an economic forum in Sri Lanka. Then he said that devaluation of the yuan creates problems for the rest of the world.

Soros was accused in the collapse of the Asian currencies during the financial crisis of 1997 and in the attack on the British pound sterling in 1992. In 2014, he announced the withdrawal from the market of financial investments, but remained as the head of Soros Fund Management.