29 January, AtoZForex.com, Lagos – Following the initial depreciation of the Renminbi in August by the People’s Bank of China, the currency has dipped about 5.7% to date. Putting the currency in a clear bearish trend. In the just concluded World Economic Forum in Davos, famed investor George Soros said he was going short the S&P 500, Asian currencies, and commodity-linked economies. In response, China fights off George Soros.
The comment sure infuriated the Chinese policy makers, who have indirectly issued a statement at Soros, saying: Beware of going to “war on the renminbi.” Although the hedge fund billionaire made no specific mention of shorting the renminbi, he did say that China was primarily responsible for the current global bear market and the country was probably looking at a hard landing.
“The Chinese left it too long to address the changeover in the growth model that they have to adopt from — investment and export-led to domestic-led. So a hard landing is practically unavoidable,” he said.
China on the offensive
As China fights off George Soros, the Chinese government have clearly taken on the offensive, releasing various pieces in an effort to discredit Soros’ claims. An article published in the People’s Daily by a commerce ministry researcher warned, “Soros’s war on the renminbi and the Hong Kong dollar cannot possibly succeed — about this there can be no doubt,
In a separate op-ed article ran in the People’s Daily newspaper, a well-known mouthpiece for the Chinese government, read:
“Billionaire investor George Soros said at the recent World Economic Forum in Davos that China’s economy is heading for a hard landing, a slump that will exacerbate the global deflationary pressures. His talking down of the Chinese financial market has led to widespread concerns and heated discussions. In fact, what Soros said was nothing new from any of the previous predictions claiming that China’s economy is about to “collapse”. Only this time it becomes more baffling with the seemingly professional terms such as “hard landing”, “deflation”, and “debt burden”.”
The man who “broke the bank of England”
Soros is known as the man who “broke the Bank of England”, an alias which is concerning to any government, especially one like China in its current condition. The attack on Soros and others points to the fact hat the Chinese government has had enough of the recent rise in bearish sentiment against the Chinese economy, hence putting the policy makers on the offensive against any one who tries to talk down sentiment further, irrespective of what was said.
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