George Soros warns China of global 'currency war'

George Soros warns China of global 'currency war'
George Soros has warned that a global “currency war” pitting China versus the 
rest of the world could lead to the collapse of the world economy.
 
By Rupert Neate
Published: 3:01PM BST 09 Oct 2010
178 Comments
The billionaire currency investor criticised China for deliberately keeping the 
yuan - its currency - low in order to keep exports cheap, which is hurting US 
competitors.
Mr Soros, the hedge fund manager best known as the man who broke the Bank of 
England” after he made a billion betting against the value of Sterling on Black 
Wednesday in 1992, said the China had created a “lopsided currency” system.
He criticised China for deliberately keeping the yuan - its currency - low in 
order to keep exports cheap, which is hurting US competitors.
 
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Mr Soros told BBC Radio 4’s Today programme that China had a “huge advantage” 
over international competitors because it can control the value of its currency.
He said China could also influence the value of other world currencies because 
they have a “chronic trade surplus”, which means the Chinese have a lot of 
foreign currencies. “They control not only their own currency but actually the 
entire global currency system,” he said.
Writing in the Financial Times, Mr Soros added: “Whether it realizes it or not, 
China has emerged as a leader of the world. If it fails to live up to the 
responsibilities of leadership, the global currency system is liable to break 
down and take the global economy with it.”
China’s central bank governor Zhou Xiaochuan defended the world’s second largest 
economy, however.
“We’ve already started to have exchange rates reform for quite long time...[but] 
it is gradual... it is good for a large economy otherwise it may be dangerous,” 
he told the BBC on the sidelines of this weekend’s International Monetary Fund 
meeting in Washington.