Ma Yun and George Soros in Hangzhou
Financier George Soros said this week that China’s global influence is set to grow faster than most people expect, with its isolation from the global financial system and a heavy state role in banking aiding a relatively swift economic recovery.
He reiterated his cautious views regarding the surge in global stock markets, although he said it may have further to go given liquidity in the markets and that many investors are still sitting on the sidelines.
“In many ways, Chinese banking has benefited from being isolated from the rest of the world and is in better shape than the international banking system,” he told an audience at Shanghai’s Fudan University.
China’s extensive capital controls have helped to shield its financial institutions from the worst of the global financial crisis.
“The influence of the state is also greater. So when the government says ‘lend’, banks lend,” Soros added. “This puts China in a better position to recover from the recession and that is in fact what has happened…”
“China is going to be a positive force in the world and the market, and as a consequence, its power and influence are likely to grow. Personally, I believe it’s going to grow faster than most people currently expect,” Soros said…
He also noted that China’s aggressive $586 billion economic stimulus programme, announced last year, had bolstered the economy.
“If that programme proves inadequate, it is in a position to apply additional stimulus. China is also in a position to foster a revival of its exports by extending credit and investing abroad,” he said.
A fair piece of my retirement investments are in China. Plus a little bit of “fooling around and making believe I know what I’m doing” money.
The latter is doing better than the former. Maybe I should listen to myself more often.