George Soros Says China 'Eerily' Looks Like America During the Financial Crisis (Source: Fortune)

He’s blaming unsustainable credit spending.

George Soros has issued another warning regarding China’s economy: It looks like America in 2007 and 2008.

Since the Chinese economic machine began slowing mid-2015, the communist-run government has been trying desperately to hit its domestic growth targets. The nation succeeded in March, when it reported that first-quarter GDP rose 6.7%—in line with its year-long target of 6.5%. But data suggests the expansion was partly driven by a massive surge of new credit which totaled $361 billion that month according to the People’s Bank of China—far exceeding the median forecast of $216 billion.

That’s a red flag that the Chinese government may be fueling growth at the risk of ballooning debt.

China’s economic situation “eerily resembles what happened during the financial crisis in the U.S. in 2007 and 2008, which was similarly fueled by credit growth,” Soros said during Wednesday’s Asia Society event in New York, according to Bloomberg. “Most of money that banks are supplying is needed to keep bad debts and loss-making enterprises alive,” he said.

Earlier this year, Soros drew the ire of the Chinese government after saying the world’s second-largest economy was headed for a “hard landing.” Soros also revealed that he was shorting Asian currencies, though he never specified either the Chinese Yuan or the Hong Kong Dollar. Chinese state media responded to his prediction with one of its own: Investors betting against China are “doomed to fail,” the People’s Daily wrote in January.

Soros is widely known for making $1 billion in a single day after shorting the British pound in 1992, and later shorting the Thai Baht in 1997. He joins a host of other investors who have professed bearish sentiments regarding China. That list includes Jeffrey Gundlach, David Tepper, and Bill Ackman.