Soros likens China trusts to subprime

George Soros, speaking at Davos earlier this year

George Soros says the immediate threat to financial markets remains the eurozone, but the mid-term challenge is for China to come to grips with its shadow banking system.

The statesmanlike investor, speaking at the Boao Forum for Asia, says a hard landing in the Chinese economy would force the People’s Bank of China to raise interest rates, triggering a wave of defaults in wealth-management products. That in turn could lead these products to “break the buck”, if their issuers fail to make up shortfalls to investors. That would lead to a market panic...