George Soros Thinks China Has a Serious Adjustment Problem

In 2011 George Soros, a well known billionaire investor, was invited to be on a panel in Washington. While on that panel Soros warned of a 2008-like catastrophe. 5 years later, while speaking at an economic forum in Sri Lanka’s capital, Soros warned of a 2008-like catastrophe yet again.

So the question is, why does Soros believe we are headed towards a financial crisis on like the one that crippled the world in 2008. The answer can be summed up in three words, weak Chinese economy.

China has been struggling for the last few years to come up with a growth model that actually works. They have also been dealing with a devaluation problem that is sending waves across the world. Even the developing world is having its problems as it has unsuccessfully figured out a way to return to positive interest rates. This according to an article posted on

It is these issues that make George Soros believe the current environment is very similar to the one from 2008.

The first few weeks of 2016 were met with chaos and uncertainty. The three biggest markets in the world on, the stock market, the commodity market and the global currency market were all under fire.

But it gets even worse. The Chinese economy is currently in the process of moving away from an investment and manufacturing economy and more towards a consumption and services economy. And while this may sound like a good thing, the problem is the Yuan is still sinking. That means the economy is getting weaker and weaker by the day. Whether or not it will be able to hold up during this shift is a big concern.

George Soros believes China’s biggest problem is their inability to adjust. And because of that, he feels they are headed for a serious crisis.

Volatility has been and still is a big problem. All the major indexes, including the Merrill Lynch index and the Chicago Board Options Exchange Volatility Index, were up at the beginning of 2016.

So now the question is what can China do to sure up its weak economy? The first thing they must do is find a new growth model. They also need to dismantle capital controls which the Communist Party has agreed to do overtime. While things won’t get better over night, if China can come up with a viable growth model as soon as possible, the economy just may start to see a turn for the better.

George Soros is a hedge fund billionaire who has been investing since the 1950’s. Since 1979 he has been heavily involved in helping the world become a better place through his Open Society Foundations organization. Today his organization is operating in over 100 countries and has had a huge impact on human rights issues all over the world.

Read more at The New York Times about George.

To learn more about Soros and his foundation visit