Soros Thinks That China Can't Avoid Hard Landing

George Soros spoke on

about the recent market turmoil. He thinks that it is 2008 all over again, but the root cause is different. The source of current disequilibrium is China, because of deflation and over-indebtedness of the Chinese economy, said Soros. He added that the Chinese government hasn't addressed issues in time and hard lending is unavoidable now. Key issue, in his opinion, is deflation, because we are not used to it and we don't know how to handle it. Last time it happened was in 1930s. Soros is observing the hard landing of China and he believes that it is manageable. China has enough resources to manage the crisis with its foreign exchange reserves, but it also has a way of passing its problems to the rest of the world. Even if the Chinese government doesn't do the transition right, the Chinese economy can continue on current course for two or three years. In that case the rest of the world is going to feel the effect of the crisis in a form of deflation, concluded Soros.