George Soros is a legendary trader and speculator. He made his mark by racking up 30% profits year after year for 30 years. From 1969-2011 his hedge fund continued to rack up profits of 20% a year for each of those years.
In the 1980s he decided to pursue a second career in philanthropy. He set up Open Society Funds to encourage people to respect one another and work for the common good. During these years he has written several books, essays and commentaries on world events.
One of his recent comments on Bloomberg was directed toward China and the chaos that China is creating that is spreading around the world. He stated: “China has a major adjustment problem. When I look at the financial markets there is a serious challenge which reminds me of 2008.’ http://www.bloomberg.com/news/articles/2016-01-07/global-markets-at-the-beginning-of-a-crisis-george-soros-says?bcomANews=true
China has gone through an industrial period similar to that of the United States from 1850 through World War 11. The difference is that China is going through this upheaval in an interconnected world. What China does affects the rest of world economies. The first phase was the rapid export driven economy where China was expanding its infrastructure and piling up huge capital reserves.
The crash of the US Stock Market in 2008-2009 turned the world upside down. An estimated $7 trillion of household wealth vanished overnight in the US alone. Faced with a loss of market share China is now trying to rebuild its economy toward a consumer driven one. This transition is painful. China is now putting the brakes on its wild expansion. To compete in world markets China is devaluing the Yuan and cutting back on imports of commodities. Commodity driven economies are near or at recession levels. Stock markets around the world are in a state of chaos.
Chinese leaders take a long view when it comes to changes in their economy. They have set a goal of 2020 to make the transition to a consumer driven economy. They plan to increase the Yuan’s convertibility and gradually dismantle capital controls.