George Soros is the very definition of evil personified, according to China’s state-run media.
In a blistering attack, Chinese media outlets have singled out the famed hedge fund manager for some incredibly harsh criticism of late, essentially blaming him for instigating concerns that rattled financial markets since the beginning of the year.
Just have a look at the first paragraph of a story that ran in the People’s Daily newspaper earlier today, remembering that the publication is a well-known mouthpiece for the Chinese government.
It is amazing.
Billionaire investor George Soros said at the recent World Economic Forum in Davos that China’s economy is heading for a hard landing, a slump that will exacerbate the global deflationary pressures. His talking down to the China’s market has led to widespread concerns and heated discussions. In fact, what Soros said was nothing new from any of the previous predictions claiming that China’s economy is about to “collapse”. Only this time it becomes more baffling with the seemingly professional terms such as “hard landing”, “deflation”, and “debt burden”.
Yes, according to the newspaper, Soros is to blame for the increase in negative sentiment towards the Chinese economy.
Not a sudden devaluing in the Chinese renminbi in August last year, something that saw capital outflows accelerate to the fastest pace on record in 2015, nor a government-backed stock market disaster that saw a gains of 150% nearly fully retrace in the space of just five months.
No, it was all one man.
The attack on Soros followed a similar story in the People’s Daily earlier this week in which paper warned Soros on declaring “war on the renminbi”.
The story, entitled “Declaring war on China’s currency? Ha ha”, stated that “Soros’ war on the renminbi and the Hong Kong dollar cannot possibly succeed — about this there can be no doubt”.
Raising eyebrows even further, the warning came despite Soros making no specific remark that he was shorting either the renminbi or the Hong Kong dollar.
According to the UK Telegraph’s Ambrose Evans-Pritchard, Soros issued no such “declaration of war” when in Davos.
“What he did let slip is that he had been shorting some Asian currencies – the Malaysian ringgit or the Thai baht, perhaps, out of nostalgia for the 1998 crisis”, wrote Evans-Pritchard.
“Mr Soros made general comments, claiming that credit in China has reached 350 percent of GDP and that the hard landing is already happening.”
“I’m not expecting it, I’m observing it,” Soros was reported to have said.
Regardless, whether it’s because Soros is high-profile or simply due to the fact that he is is known as the man who “broke the Bank of England” back in 1992, China’s powerbrokers have deemed that the best form of defence is attack when it comes to those talking down the Chinese economy, regardless of what they have actually said.
Not content with singling out Soros for some unwarranted attention, the People’s Daily also took aim at the world’s largest economy, the United States.
Here’s another snippet from today’s op ed, comparing the strength of China’s economy to US-based on two curious metrics.
There is this Singles’ Day, a Chinese e-commerce holiday that falls on November 11 annually – merely on this day alone last year we saw three times the purchases spent by all U.S. online shoppers on both Black Friday and Cyber Monday together. For the United States, in the contrast, one out of eight families lived on food stamps and over 120 thousand families filed for bankruptcy every month after the financial crisis. It is obvious that, even without any professional analysis, these simple and concrete observations are saying that the landscape of Chinese economy is prosperous.
Comparing apples to oranges immediately comes to mind at the very minimum.
According to data from the World Bank, about 98.99 million people in China still lived below the national poverty line of RMB 2,300 per year at the end of 2012, the second largest number of poor in the world after India.
It’s very simple, and indeed simplistic, to simply use one metric to gauge the relative strength of one economy compared to another.
Regardless, the People’s Daily, among other state-backed publications, have gone to an extraordinary length to suggest that those talking down the economy, be they individuals or entire nations, are wrong.
They suggest that those predicting the demise of the Chinese economy are fabricating “falsehood and lies”, stating that “China is the locomotive in the world economic growth train, whether they like it or not”.
While the attack on Soros and others may be simply a sign that policymakers are fed up with the sharp lift in bearish sentiment towards the Chinese economy of late, the nationalistic diatribe unleashed over the past few days has clearly touched a nerve.
This may be because the authorities know the bears are wrong. However, to the contrary, it could also be perceived as a sign they know they’re right.