George Soros is a well known public figure on https://en.wikipedia.org/wiki/George_Soros, not to mention an extremely wealthy billionaire who put together a $24 billion nest egg through wise investments in the markets. According to George Soros, China’s economy is facing imminent danger much like The United States went through back in 2007-2008, when the housing boom collapsed and credit markets halted, causing a deep recession that ended up lasting a few years. If this does occur, it can be detrimental to China, as they have the world’s second largest economy.
The collapse on http://www.nybooks.com/contributors/george-soros/ that the United States went through preceded a significant credit growth. This is why George Soros is trying to warn the world that something bad may lie ahead in China. He feels that the Chinese Government is focusing their effort on growth instead of riding the wave of debt. The most recent measure of new credit in a Bloomberg survey in China shows 2.34 trillion yuan. That is extremely higher than the median prediction of 1.4 trillion yuan. A significant percentage of the money that China’s banks are dealing out is needed to sustain enterprises that are losing money. The banking system in China has more loans out than it has deposits and is struggling to balance their assets vs liabilities. George Soros feels that China’s banking system is in trouble due to the fact that they have resorted to lending each other money. The banks should be able to sustain themselves by doing this for awhile, but the problem is only growing.
Another eerily similar trend currently happening in China that resembles what the United States went through prior to their downfall on http://www.georgesoros.com/ is that the housing values have risen sharply, with new homes soaring a whopping 62 percent in one year. It is known as a parabolic cycle, and a good percentage of the possible upcoming damage can happen in the latter part of a recession. Read more: George Soros, Author and Philanthropist Warns of Upcoming Collapse
It seems difficult to discredit what George Soros has to say about this topic on http://www.investopedia.com/university/greatest/georgesoros.asp, as he has been around for awhile and has an extensive financial background. George Soros was born in 1930, and he relocated to the United States after graduating from the London School of Economics. He has been a philanthropist since 1979, and was the founder and manager of a large international investment fund. He has written numerous articles for several newspapers on politics and is an author of more than a dozen books.
Many disagree with George Soros stating that he has issued warnings like this before. And on a positive note, George Soros agrees that there has been cooperation between the U.S. and China, calming down the markets a bit and that China’s service industry is on the rise.