Beijing warns Soros against underestimating Chinese currency

Chinese state media stepped up a salvo of biting commentaries on Wednesday against George Soros and other currency traders as the yuan comes under pressure, with the billionaire investor accused of “declaring war” on the unit.

At the annual World Economic Forum (WEF) in Davos last week Mr Soros told Bloomberg TV that the world’s second-largest eco-nomy — where growth has already slowed to a 25-year low according to official figures — was heading for more troubles. “A hard landing is practically unavoidable,” he said.

Mr Soros — whose enormous trades are still blamed in some countries for contributing to the Asian financial crisis of 1997 — pointed to deflation and excessive debt as reasons for China’s slowdown.

The normally stable yuan, whose value is closely controlled by Beijing, has come under pressure in recent weeks and months in overseas markets and from capital outflows, and officials have spent hundreds of billions of dollars to defend it.

China’s official Xinhua news agency on Wednes-day said that Mr Soros had predicted economic troubles for China “several times in the past”. “Either the short-sellers haven’t done their homework or... they are intentionally trying to create panic to snap profits,” it said.

The comments came after the People’s Daily, the official mouthpiece of the Communist party, published a front-page article on Tuesday titled “Declaring war on China’s currency? Ha ha” that was widely shared on Chinese social media.

Mr Soros “publicly ‘declared war’ on China”, the paper said, citing the 85-year-old as saying that he had taken positions against Asian currencies. But some readers questioned whether the official rhetoric could fuel Chinese investors’ fears.

“They say a lot of loud slogans, but do official media even know that Chinese investors are in hell?” said one poster on China’s Twitter-like Weibo.