Many investors are cheering China on Tuesday, following news that the country’s industrial production rose 13.3 per cent in May. And while Chinese inflation also moved higher, to an annual rate of 5.5 per cent, it was in line with expectations and it looked as though authorities there were doing something about it: The central bank raised the reserve requirements for banks, forcing them to hold more assets, for the sixth time this year alone.
However, George Soros isn’t convinced of the good news. According to Bloomberg News, the billionaire financier and chairman of Soros Fund Management believes that China is showing signs of having lost control over inflation and risks a hard-landing as it attempts to bring conditions in line with its long-term expectations.
Speaking at a conference in Oslo, he added that China is in a “bit of a bubble.” More details would have been nice – but nonetheless it is interesting to see that such an influential voice is among the doomsayers. Then again, Mr. Soros is downbeat on many things. He maintains that efforts to kick-start the U.S. and European economies have failed to address underlying imbalances in their respective economies, leaving the global economy vulnerable. He also recently ditched most of his gold holdings, according to filings to the U.S. Securities and Exchange Commission.
So what is he upbeat about? Africa. The Bloomberg article noted that turmoil in the developed world has prompted him to turn to the region, which he described as an “attractive area to invest in.”