A Billionaire’s Take on the China Theme

George Soros and other influential voices at the 2012 World Economic Forum found China at the center of financial discourse

By staff reporters Hu Shuli, Ni Weifeng and Li Zengxin for English Caixin

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It would have been a brutal mistake to read a Chinese delegation’s light showing at the recent World Economic Forum as a sign that, in a world rattled by financial turmoil, China didn’t matter.

In fact, the growing importance of China for an international community trying to navigate stormy financial waters was a common thread in discussions among economic soothsayers and sages, from Hungarian-American billionaire George Soros to Australian diplomat Kevin Rudd, who gathered in the snowy Swiss Alps town of Davos.

Some at the annual economic meeting of minds criticized outright China’s form of state-company capitalism. Others offered more diplomatic analyses of the country’s development since the reform-and-opening movement began in the 1970s.

Western participants at Davos included those who want Beijing to get more deeply involved in resolving the euro zone’s debt crisis. Emerging market watchers focused on China’s overseas investment as a major force for global economic growth. Other conversation topics took note of China’s evolving relationship with the International Monetary Fund (IMF).

Back in China, paralleling the conference, nightly fireworks bathed city skies in color to mark the Chinese New Year and the Spring Festival holidays. A substantial number of Chinese government and company leaders who had attended Davos sessions in past years apparently opted to stay home.

Among those attending the forum, at the expense of traditional family gatherings, were Zhang Xiaoqiang, Vice Chairman of National Development and Reform Commission and Donald Tsang, Chief Executive of the Hong Kong Special Administrative Region.

Heavyweight economists, investors, corporate chiefs and government finance leaders from many other corners of the world traveled to wintry Davos, too, and contributed to the discourse. Several spoke with Caixin.

One was Soros, for whom financial crises in the past brought enormous financial gains. He successfully shorted British pounds in 1992 and Southeast Asian currencies in 1997. He reaped another windfall in 2007 while many investors were losing fortunes in the U.S. subprime mortgage crisis.

Speaking after a press luncheon January 25, Soros sat down with Caixin and offered thoughts on what’s gone wrong in Europe, describe unheeded policy direction from the industrial-era British economist John Maynard Keynes, analyze state capitalism and, of course, touch on China.

Soros cast eyes beyond the systemic loopholes that made him rich. The 82-year-old financial speculator and famous philanthropist talked about repairing fences as well. And, as he had in years past, he used the Davos stage to sound warnings.