Early this year, George Soros told an economic symposium in Sri Lanka that the financial crisis plaguing the world on bloomberg.com was as a result of serious adjustment problems in China. He gave the reasons as the devaluation of the Chinese Yuan and failure by China to find a new growth model. According to the report by Bloomberg correspondents, Anusha Ondaatjie and Adam High, Soros reckoned that it will be very difficult for the developing world, led by China to return to positive territory when it comes to interest rates. Following the crisis, the global commodities, currencies and stock markets took a nose dive in the first week of January 2016. Soros saw the unfolding crisis as something reminiscent to the 2008 financial crisis.
At the height of the crisis on Wednesday 6, January 2016, a total of $2.5 trillion was cleared off the value of global equities on facebook.com, with Asia bearing the brunt. The drop in the value of Yuan made things even more difficult, as it revealed inherent weaknesses in the Chinese Economy. The crisis as hit at a time when government officials in China are mapping strategies that would pivot the economy from one driven by manufacturing and investment to a consumption and service based economy. In the meantime, Bloomberg reports that China’s Communist Party has confirmed that it is going to increase Yuan’s convertibility before 2020, even as it moves to remove capital controls.
In spite of the decision by the People’s Bank of China to reduce interest rates and pump billions into the economy, the world’s second largest economy continues to reel from a weak manufacturing sector. George Soros is also deeply conscious of the events happening in Ukraine, which poses a serious threat to Europe. He solely blames European governments for lack of foresight. According to an article, George Soros wrote in New York Books on October 2015, out of the 5 critical crises facing Europe. The Russian aggression towards Ukraine is the one that needed utmost priority, considering its potential to unify Europe. He mentioned the other problems as Greece, migration, the Euro and the impending “Brexit” referendum.
About George Soros
Soros is a world renowned philanthropist, investor and Chairman of Soros Fund Management LLC. He graduated from the London School of Economics with a Master’s and a bachelor’s degree in philosophy. Soros has written several books, articles and essays on various topics including; economics, society and politics. According to the website GeorgeSoros.com, some of his best selling Soros books include “The Tragedy of The European Union”; “The Crash of 2008 and What it Means”, and “The Age of Fallibility that was published in 2007. His works have also appeared in various international newspapers and news journals.