Inflation could get out of control in China, says George Soros

Legendary financier George Soros comments on the Chinese government's mistake in its handling of the country's inflation.

China's "shadow banking system is growing out of control" warns legendary financier George Soros. The 81-year-old Hungarian-American says the Chinese government "made a mistake not allowing its currency to appreciate" as that has pushed up the local cost of imports like oil. That could cause a "wage-price spiral".

And while he praised the Chinese government's success in stimulating the economy after the crisis, he thinks they will have a much harder time trying to "rein it in" now. "Big banks under direct control are (following government instructions) refusing to lend" but unofficial "shadow" lenders are harder to stop.

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James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.