Closer China-U.S. Ties “Indispensable” for Recovery – Soros

Hong Kong – Billionaire investor George Soros said cooperation between China and the U.S. was “indispensable” as the world economy recovers from the worse recession in recent decades.

“They should understand each other and agree to disagree,” Soros said at a forum at The University of Hong Kong on Wednesday. Otherwise, nothing can be accomplished in improving global regulation to prevent future financial crisis, he said.

China-U.S. ties have chilled recently over President Barack Obama’s plans to meet the Dalai Lama, the Tibetan spiritual leader-in-exile, and proposed arms sales to Taiwan.

“Neither side fully understands how the other side views these issues,” the founder of hedge-fund firm, Soros Fund Management LLC said. “Relations between the two countries has deteriorated and is moving to a wrong direction.”

He said the Chinese official leadership is strong in “self-criticism” and “conscious in doing the right things,” but still needs to be more open and pay attention to “how the rest of the world views” as the country rises to the center stage of global economy.

“China is the country which (has) survived the financial crisis the best,” said Soros during his second visit to the university since 2001. “And it can only rise peacefully when the rise is accepted by the world.”

Emerging Markets Lead Global Growth

China, the third-largest economy in the world, grew at 8.7 percent last year, beating the official eight percent target, according to the country’s National Bureau of Statistics. China would outpace the 3.1 percent global growth and grow at nine percent this year, the International Monetary Fund estimates.

Emerging markets including China, Brazil and India will continue to grow faster than the U.S. and Europe-led developed countries, Soros said.

Soros, who bet against the British pound in 1992 and earned as much as $1 billion, said bad assets in European banks and the “significant sovereign debts” in some countries are still weighing on the region’s road of economic recovery.

European countries face a “rather bleak outlook in the near future,” but Greece would not default because “it is much more painful”, he said.