China's current market turmoil 'reminds me of the crisis we had in 2008'
Billionaire George Soros warned investors on Thursday that the global economy could be facing a crisis.
At an economic forum in Sri Lanka, the hedge fund luminary pointed toward China’s currency devaluation and economic slowdown as major factors weighing down the global markets, Bloomberg reported. He said that the turmoil is a result of China’s struggle to transition to a new growth model.
On Thursday, a plunge in Chinese equities spilled over to send global markets into a tizzy. The Dow Jones Industrial Average dropped more than 200 points after the Chinese Central Bank made its most significant downward adjustment of its currency since August, according to The Wall Street Journal.
Chinese markets had their shortest day in history—a mere 30 minutes—after a newly installed circuit breaker designed by the China Securities Regulatory Commission halted trading. Though the circuit breaker was designed to stabilize markets amid volatility, the regulator reportedly decided to stop using the mechanism after its use Thursday sent jitters through the markets.
Soros said that the current economic volatility is worrisome. “China has a major adjustment problem,” he said. “I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”