Liberal billionaire George Soros on Thursday warned that the U.S. and China, the world’s two largest economies, are locked in a “cold war that could soon turn into a hot one.”
His comments come at a time when investors are increasingly concerned about a serious economic downturn, with a long-running U.S.-China trade war souring business and consumer sentiment.
Referencing Trump’s decision to label China as a “strategic” competitor in late 2017, Soros said this approach was “too simplistic.”
“An effective policy towards China can’t be reduced to a slogan. It needs to be far more sophisticated, detailed and practical; and it must include an American economic response to the Belt and Road Initiative,” he said.
Soros, a major Democratic donor and critic of President Donald Trump, was speaking at a private dinner at the World Economic Forum (WEF) in Davos, Switzerland.
“The reality is that we are in a cold war that threatens to turn into a hot one.”
“Regrettably, President Trump seems to be following a different course: make concessions to China and declare victory while renewing his attacks on U.S. allies. This is liable to undermine the U.S. policy objective of curbing China’s abuses and excesses,” he said.
“The reality is that we are in a cold war that threatens to turn into a hot one,” Soros added.
Washington and Beijing have been stuck in a tit-for-tat trade battle for several months.
A January get-together of international heads of state in snow-clad Davos was initially expected to provide a platform for both sides to hold talks ahead of a March 2 deadline.
But, the White House abruptly canceled its delegation to Switzerland last week, citing the ongoing government shutdown.
The next round of negotiations is scheduled to take place at the end of the month, when Chinese Vice Premier Liu He travels to meet U.S. officials in Washington.
“If (President) Xi and Trump were no longer in power, an opportunity would present itself to develop greater cooperation between the two cyber-superpowers,” Soros said.
At the same speaking event, the Hungarian-American businessman also described China’s Xi as the “most dangerous” opponent to those who believe in open society.