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Soros Fund Management | Actively avoiding Chinese concept stocks, confirms holding cryptocurrencies, Investment Director: Bitcoin has crossed the mainstream divide

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Soros Fund Management | Actively avoiding Chinese concept stocks, confirms holding cryptocurrencies, Investment Director: Bitcoin has crossed the mainstream divide

The Chief Investment Officer of Soros Fund Management was interviewed and mentioned that the company is actively avoiding investments in Chinese concept stocks. It is expected that Chinese concept stock companies will face the risk of delisting and seek a secondary listing in Hong Kong. Additionally, it was revealed that the view on the recovery of stock prices is still too cheap, and the company holds some investments in cryptocurrencies.

George Soros Criticizes Xi Jinping

Legendary investor George Soros criticized Xi Jinping in a Financial Times column on 8/30, titled "Investors Wake Up to China Led by Xi Jinping," highlighting the following points.

Crackdown on Private Enterprises

His crackdown on private enterprises severely weakened the economy, especially the most vulnerable real estate sector. The Chinese real estate market has been booming for the past two decades but has reached its peak. The largest real estate company, Evergrande, is heavily indebted and faces default risks, which could lead to a collapse. The significant falsification of China's official population statistics is also a fundamental reason, with birth rates far lower than official data.

Government Investment, Viewing Chinese Companies as Tools of One-Party Rule

In April, the Chinese government quietly invested in ByteDance, the parent company of TikTok, holding a seat on its board and gaining direct access to one of the world's largest user databases, raising concerns about the CCP's acquisitions of shares in Alibaba and its subsidiaries.

Soros criticized:

A series of policies that suppress private enterprises prove that Xi Jinping completely misunderstands how a market economy operates. The result is a drastic sell-off. Despite the Chinese authorities' efforts to reassure foreign investors and the market's strong rebound, it is a deception. Xi Jinping views Chinese companies as tools of one-party rule, and investors are gradually realizing this.

Additionally, Dawn Fitzpatrick, Chief Investment Officer of Soros Fund Management, in an interview with Bloomberg, echoed Soros's views, stating that the fund is avoiding Chinese concept stocks and mentioned holding some cryptocurrencies, confirming Soros's previous endorsement of the digital asset market.

Warning to Investors in Chinese Concept Stocks

Fitzpatrick stated that Soros Fund Management is currently not investing in any Chinese concept stocks, cautioning investors to be very careful when investing in U.S.-listed Chinese companies and expressing surprise at the Chinese authorities tolerating massive economic losses to implement policies. She said:

Chinese companies listed in the U.S. will be forced to seek a secondary listing in Hong Kong. It will take some time for Chinese early-stage venture capital firms to go public. Although some large companies may list in Hong Kong in the near future, overall, it remains a long road for Chinese private enterprises to list in Hong Kong.

Confirming Investment in the Cryptocurrency Market

In March of this year, Fitzpatrick mentioned that cryptocurrencies are at a turning point. By the end of June, anonymous sources indicated that Fitzpatrick and the company team had been exploring cryptocurrencies for some time and had decided to enter the market, rather than just testing the waters. This interview also confirmed that Soros Fund Management has made related investments. Fitzpatrick stated:

I think Bitcoin has crossed the bridge to become mainstream. The cryptocurrency market now exceeds $2 trillion in value with over 200 million users worldwide. I believe it has entered the mainstream. We hold a few tokens, but these cryptocurrencies are not as interesting as use cases like DeFi.

Soros Fund Management injected $5 billion into the market last March. However, Fitzpatrick mentioned that the current stock prices, despite the recovery, are still too cheap and believes that these companies have learned how to do things better during the pandemic crisis, with ample cash among U.S. consumers, indicating a buy-in opportunity.