Update | Communist mouthpiece accuses billionaire investor George Soros of ‘declaring war against China’
Announcement to short Asian currencies put a bulls-eye on billionaire as China’s Central Bank struggle between keeping the yuan stable or reviving the economy
The strong words come amid a policy dilemma for Beijing’s central bankers. One one hand, they face expectations of further interest rate hikes by the US Federal Reserve and further monetary easing in Japan. On the other hand, they face a slowdown in the domestic economy that has come at the same time as China tries to restructure its economic drivers. So the central bankers face a stark choice – keep the yuan stable or revive the economy.
READ MORE: China should know that Soros is an expert at seeing through official bluster
Both the Hong Kong dollar and the yuan fell yesterday morning as speculators returned to the market and the two central banks stayed away. The Shanghai stock market index lost 6.4 per cent to hit a 13-month low.
Soros said last week that a hard landing in the Chinese economy was “unavoidable” and he was shorting Asian currencies.
In a move to manage the fallout, Beijing is using its state media to fend off speculators.
In an English-language commentary published shortly after Soros made his comments at the World Economic Forum in Davos, Switzerland, the mainland’s Xinhua news agency warned and even threatened those who kept bearish views on China’s growth and currency prospects.