Investment Expert & Billionaire George Soros Predicts China’s Economic Crisis Is Difficult to Overcome.
ViVA POST – China is facing an economic crisis after a real estate boom ended in trouble last year, according to U.S. investor and billionaire George Soros. President Xi Jinping may not be able to restore confidence in the troubled industry, which has been hit by a series of debt defaults by property developers and falling prices of land and apartments in China.
China’s real estate boom is based on an “unsustainable” model that intends to benefit local governments and encourage people to invest most of their savings in property, Soros said. According to him, government policies designed to curb the boom make it harder for the indebted real estate giant Evergrande to pay its debts.
Property developers staggered with more than $300 billion of total debt obligations. There are also about $19 billion in foreign bonds, held by international asset managers and private banks on behalf of their clients.
Evergrande has struggled for months to raise cash to repay lenders. Government officials were sent to the company to oversee the restructuring, but there was little clarity on what would happen next.
Soros has in recent years emerged as a leading critic of Xi and China’s ruling Communist Party. The legendary investor and chairman of the Open Society Foundations said in September that asset manager BlackRock was making a “tragic mistake” by doing more business in China.
Soros also criticized Beijing for its surveillance policies and a crackdown on private businesses. China’s president now faces risks from the property market, according to Soros, who spoke just days before the start of the Winter Olympics in Beijing.