BEIJING: Chinese state media stepped up a salvo of biting commentaries Wednesday against George Soros and other currency traders as the yuan comes under pressure, with the billionaire investor accused of “declaring war” on the unit.
At the annual World Economic Forum in Davos last week Soros told Bloomberg TV that
the world’s second-largest economy—where growth has already slowed to a 25-year low according to official figures—was heading for more troubles.
“A hard landing is practically unavoidable,” he said.
Soros—whose enormous trades are still blamed in some countries for contributing to the Asian financial crisis of 1997—pointed to deflation and excessive debt as reasons for China’s slowdown.
The normally stable yuan, whose value is closely controlled by Beijing, has come under pressure in recent weeks and months in overseas markets and from capital outflows, and authorities have spent hundreds of billions of dollars to defend it.
China’s official Xinhua news agency on Wednesday said that Soros had predicted economic troubles for China “several times in the past.”
“Either the short-sellers haven’t done their homework or . . . they are intentionally trying to create panic to snap profits,” it said.
An English-language op-ed in the nationalistic Global Times newspaper blamed “Westerners” for not “accepting responsibility for the mess” in the world economy.
The comments came after the overseas edition of the People’s Daily, the official mouthpiece of the Communist party, published a front-page article Tuesday titled “Declaring war on China’s currency? Ha ha” that was widely shared on Chinese social media.
Soros “publicly ‘declared war’ on China,” the paper said, citing the 85-year-old as saying that he had taken positions against Asian currencies.
But some readers questioned whether the official rhetoric could fuel Chinese investors’ fears.
“They say a lot of loud slogans, but do official media even know that Chinese investors are in hell?” said one poster on China’s Twitter-like Weibo.
“I’m afraid that Chinese investors will die in a stampede before Soros even shows his hand.”
In the 1990s Soros led speculators in bets against the Bank of England, which unsuccessfully sought to defend the pound’s exchange rate peg.
“The Chinese left it too long” to change their growth model from dependence on exports to a consumer-led one, Soros said, even though Beijing had “greater latitude” than others to manage such a transition because of its currency reserves, which stand at over $3 trillion.