George Soros - on China and its inflation problems

14 Apr 2011 Bretton Woods
Inflation in China is a serious concern. China has stimulated its economy full force quite successfully and now it is trying to reign in the rate of growth and it is trying to constrain the banking system. But because of that constraint and the great demand for money a shadow banking system is emerging and growing quite rapidly. So while the big banks which are under direct government control are in fact refusing to lend, the shadow banking system is growing out of control [Amazing]. So there is a real danger of wage price inflation because prices and particularly real estate prices have gone up. Therefore wage demands have risen [!]. So the Chinese government made a mistake not allow its currency to appreciate which would have controlled inflation. As a result you have had wage inflation which is a little bit out of their control.

[Edited from the version uploaded by AntiSchiff]

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