China and the United States should increase their cooperation on economic matters to reduce the chances of a third world war, said billionaire investor George Soros on Tuesday. Speaking at a Bretton Woods conference at the World Bank, Soros called on the U.S. to make the "major concession" and allow China's currency to join the International Monetary Fund's basket of currencies. This would make the yuan a rival to the dollar as a global reserve currency. In return, China would also have to make concessions to reform its economy, Soros said. Soros said it was not an exaggeration to say the world could be on the threshold of a third world war, especially if China's economy falters. Soros warned if China is unsuccessful at making the transition from an export-led economy to domestic-demand-led growth, the ruling party might resort to external conflict to keep the country together and stay in power. Agreement between the two countries will be difficult to achieve but "without it there is a real danger China will align itself with Russia politically and militarily and then the threat of world war becomes real, so it is worth trying," Soros said.
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