索罗斯：目前的中国像极了2007年债台高筑的美国

George Soros says China's credit-fuelled growth echoes US in 2007-08

by Bonnie Cao and Ye Xie

Billionaire investor George Soros said China's debt-fuelled economy resembles the US in 2007-08, before credit markets seized up and spurred a global recession.

China's March credit-growth figures should be viewed as a warning sign, Mr Soros said at an Asia Society event in New York on Wednesday. The broadest measure of new credit in the world's second-biggest economy was 2.34 trillion yuan ($465 billion) last month, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey and signalling the government is prioritising growth over reining in debt.

What's happening in China "eerily resembles what happened during the financial crisis in the US in 2007-08, which was similarly fuelled by credit growth," Mr Soros said. "It can reach a turning point later than everyone expects."

Mr Soros, who built a $US24 billion fortune through savvy wagers on markets, has recently been involved in a war of words with the Chinese government. He said at the World Economic Forum in Davos that he's been betting against Asian currencies because a hard landing in China is "practically unavoidable." China's state-run Xinhua news agency rebutted his assertion in an editorial, saying that he has made the same prediction several times in the past.

Capital outflows from China are a growing phenomenon driven by the nation's anti-corruption campaign, which makes people nervous and spurs them to pull money out, Mr Soros said. While China's reserves swelled by $US10.3 billion in March to $US3.21 trillion, they're down by $US517 billion from a year earlier.

Mr Soros was more positive about China's efforts to link the yuan to a broad basket of currencies rather than just the US dollar, saying that is a healthy development.

Mr Soros has warned of a 2008-like catastrophe before. On a panel in Washington in September 2011, he said the Greece-born European debt crunch was "more serious than the crisis of 2008."

The Hungarian-born investor rose to fame as the manager who broke the Bank of England in 1992, netting $US1 billion with a bet that the UK would be forced to devalue the pound. Malaysian Prime Minister Mahathir Mohamad called him a "moron" during the 1997 Asian financial crisis, saying he was out to wreck the region's economies. Mr Soros, who began his career in New York in the 1950s, saw his hedge fund post average annual gains of about 20 percent from 1969 to 2011.

China's economy stabilised last quarter and gathered pace in March as the surge in new credit helped the property sector rebound, while raising fresh questions over the sustainability of the debt-fueled expansion. Gross domestic product increased 6.7 per cent in the three months through March, in line with the government growth target of 6.5 per cent to 7 per cent for the full year.

Ma Jun, the chief economist at the central bank's research bureau, said in a speech this month that recent data points including real estate investment growth, industrial value-added growth, and producer prices indicate the economic outlook is probably better than some economists forecast.

The stabilising trend isn't giving investors "enough confidence," as China seems to have relied more on government investment in state-owned enterprises to boost the economy, said Gao Xiqing, former vice chairman of the China Securities Regulatory Commission, in an interview in New York this week.

China stepped up intervention in its financial markets after turmoil in its stock market roiled global markets at the start of the year and extended last year's $US5 trillion selloff, while the yuan fell to a five-year low.