George Soros’ famous video about the Japanese Yen collapsing is now all over the internet, right? Of course! We posted the CNBC interview shortly after it aired and it caused shockwaves on both sides of the Pacific. But here is what you missed from George Soros, which no one has posted. A short interview conducted several days ago. George Soros speaks at the Institute for New Economic Thinking’s “Changing of the Guard?” conference in Hong Kong on what he sees as the most urgent issues in the global economy. Additionally, here some text from Soros on China below (the same Hong Kong publication cited our article on the labor movement today), followed by the ‘new’ clip:
Chinese Economy and the new Leadership
Q: What do you think of China’s economic performance in the past year?
A: Since 2008, when the financial crisis started in the US, China became the motor of the global economy. It became the driving force moving global economy forward. China’s economy is much smaller still than the US. It is smaller than the US consumer [economy]. Therefore, the growth has been slower since 2008 than it was before. So I rate China’s contribution quite high.
Q: What are the main threats to the Chinese economy?
A: They are partly external, because of the slow growth, and the inability of the global economy to continue to absorb the ever-increasing Chinese exports. And internal, because China has to change its growth model. China has to reorient itself from export and investments to domestic consumption.
It is going to be a very difficult transformation, because the household consumption is only 1/3 of the Chinese economy. Exports and investments are 2/3. The growth of 1/3 cannot make up for the slower growth in the 2/3. Therefore, the overall growth rate will have to be significantly slower than it has been up to now. That is a very important point.
I don’t have enough knowledge to have an estimate [of China’s GDP growth rate this year], but the official estimate is 7.5 per cent. The important point is that it is less than the 8 per cent which was considered sacrosanct until now. It was in fact significantly exceeded in reality. That means significantly lower growth.