The renowned investor George Soros says the situation in 2016 is extremely similar to that in 2008 when the last economic crisis occurred.

This time however, the crisis may not be due to the American subprime but rather to the current economic struggle that China faces. “Unfortunately, China has a major adjustment problem. It has many decisions to take and could very well transfer its problems to the rest of the world by devaluing its currency. And that is just what it is doing,” Soros said during the Sri Lanka Economic Forum.

“When I look at the financial markets there is serious challenge which reminds me of the crisis we had in 2008,” he said. The billionaire fears a global deflation which would drive firms to slow their investments and consumers to postpone purchases.

George Soros believes that the “banking system, who has been lending so much to developing countries, is now reversing the trend” as liquidity is becoming a more attractive investment.