George Soros is one of the most famous financiers in the world. Over the past several years he has mostly got his forecasts right.
BusinessWeek reported that in Bloomberg Television in an interview in Cambridge, England, he was asked him whether China’s authorities have done “enough” to contain the bubble. His answer was basically in the negative. He said, the “danger” is that the bubble “keeps on growing.”
Meanwhile hedge fund manager James Chanos said that China’s property market is a bubble that may burst by as early as this year.
The world’s third-biggest economy may need to keep up the pace of property investment because up to 60%f its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The Charlie Rose Show” that will air on PBS and Bloomberg TV.
"China is on a treadmill to hell. They can’t afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing.”
Property prices in China rose at the fastest pace in almost two years in February even after officials this year re-imposed a tax on homes sold within five years of their purchase to curb speculation and ordered banks to set aside more funds as reserves to cool lending.
BusinessWeek reports that since his original January prediction, Chanos, the founder of Kynikos Associates Ltd, has been joined by Harvard University professor Kenneth Rogoff in warning of a potential crash in China’s property market.