Ignore George Soros’ prophecy of doom; China has its economic situation well under control

In an interview with Bloomberg TV in Davos at the World Economic Forum, George Soros declared that a hard landing of the Chinese economy was “almost unavoidable”, and that he has shorted US stocks and Asian currencies. This statement amounted to a formal declaration of war with China. The sharp fall in offshore renminbi and the Hong Kong dollar recently should be regarded as skirmishes.

The Chinese economy is now in a “new normal” status, with the growth rate slowing to below 7 per cent. This would be a relatively high rate in any other country, but it is a record low for China since its reform and opening up in 1978. Hence, it has created speculation overseas. Moreover, the yuan has devalued against the US dollar and there have been large fluctuations in China’s stock market, causing swings in stock and currency markets around the world.

Soros was aware that the deciding factor of his final battle lay in a general evaluation of China’s economic situation. To aid his financial attack, he has repeatedly let it be known that he is very pessimistic about the Chinese economy, to create a state of panic among the global investment community.

President Xi Jinping (習近平) first brought up the term “new normal” during his inspection tour to Henan (河南) in May 2014, when he said, “The development of our country is still in an important strategic era of opportunity. We have to raise our confidence, starting from the characteristics of the current stage of our country’s development, to adapt to the new normal, and strategically maintain a calm state of mind.”