June 8, 2009 - 10:37am
On Sunday addressing an audience at Shanghai's Fudan University George Soros said that the influence of China is yet to grow faster than most people think with its isolation from the global financial system and a heavy state role in banking aiding a relatively swift economic recovery.
"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.
In Soros’ view China's extensive capital controls have helped to shield its financial institutions from the worst of the global financial crisis.
"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.
Yet, Soros acknowledged that there are some doubts about Chinese economy recovery citing such data as a continued fall in electricity consumption. In addition he noted China’s aggressive 4 trillion yuan (US$586 billion) economic stimulus program, announced last year.
"If that program 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.
He reiterated his view that because China's economy is only one-quarter the size of the U.S. economy, it cannot replace the American consumer as the motor of the global economy, so global growth will be slower than in the past.
He sounded a more upbeat note for China's asset markets than for global markets overall, where he remained wary.
"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.
In Soros’ view China's extensive capital controls have helped to shield its financial institutions from the worst of the global financial crisis.
"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.
Yet, Soros acknowledged that there are some doubts about Chinese economy recovery citing such data as a continued fall in electricity consumption. In addition he noted China’s aggressive 4 trillion yuan (US$586 billion) economic stimulus program, announced last year.
"If that program 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.
He reiterated his view that because China's economy is only one-quarter the size of the U.S. economy, it cannot replace the American consumer as the motor of the global economy, so global growth will be slower than in the past.
He sounded a more upbeat note for China's asset markets than for global markets overall, where he remained wary.