George Soros continues saying that China is in for a hard landing which may collapse market conditions on project-syndicate.org around the globe. He says that the situation for investors and banks is eerily similar to those in 2008 with many investors refusing to see the market developing just like they refused to acknowledge conditions in 2007, according to an article published via Bloomberg.
Meanwhile, the official Xinhua News Agency calls Soros partially blind. Chinese government officials say that George Soros’s statement is too important to ignore because of the effect that he had on the Bank of England where he netted over $1 billion dollars by short selling stocks and forcing the British government to pull the British pound from the European Exchange Rate Mechanism. They also say that Soros is an important leader that must be answered because of his involvement in the 1997-1998 Asian crisis causing financial contagion where many investors and government leaders feared a world economic meltdown. During this time on http://www.bloomberg.com/news/articles/2016-04-20/soros-says-china-s-debt-fueled-economy-resembles-u-s-in-2007-08, Association of Southeast Asian Nations leaders which included governmental leaders from Indonesia, Malaysia, the Philippines, Singapore, and Thailand claim that George’s trading caused economies to collapse, especially in Malaysia.
George Soros says China’s current housing bubble is very similar to conditions seen in the United States in 2008. 75 percent of the wealth of residents in China is in real estate with the country having seven of the 10 most expensive cities in the world. Furthermore, experts point out that the average Chinese Tier 1 condo measuring just 650 square feet sells for $300,000 while the same condo in a Tier 2 city sells for over $100,000. In other words, these condos are selling for about 30 times on investopedia.com what the average resident brings home annually. According to the government, Soros should stop worrying about the housing bubble because only 18 percent of their homes have a mortgage because family and friends help young people buy their first homes outright. While only about 10 percent of the United States population owns more than one home about 20 percent of residents in China own more than one home. If the bubble collapses, then the result could be even more devastating.
George Soros and others say that the situation is very similar to what was seen in Japan in the 1980s where prices dropped over 60 percent in five to seven years. If that happens in China, then $12.2 trillion in wealth would just disappear. George Soros and others warn that if real estate prices fall causing the residents to lose their personal wealth, it will have a devastating effect in other cities with a large Chinese population including Vancouver, Canada; New York City; London; San Francisco, California; Manchester, Enland and Melbourne, Australia.