Billionaire financier George Soros is warning of an impending financial markets crisis as investors around the world were roiled by turmoil in China trade for the second time this week. This is a real concern but if the eventual Yuan devaluation is as much as 15%, hopefully the adjustment and extra cost will be offset by the lower cost of a major import, oil and other commodities.

Speaking at an economic forum in Sri Lanka, Soros said that China's economic issues can be traced back to their struggle to find a new growth model, coupled with its currency manipulation.

Interest rates in the United States going to positive territory the trends may get stronger, he added.

Further Soros said Global markets are facing a crisis and investors need to be very cautious.

The Thursday selloff in China was more about the country's economy than its stock market.

The crash has echoes of last year's stock market crash when the FTSE 100 recorded one of the largest one-day losses of the past decade in September, in a trading session dubbed "Black Monday".

"I would say it amounts to a crisis", Soros said.

He said deflation was bad as people tended to repay debt.

Soros's hedge-fund gained about 20 percent a year on average from 1969 to 2011, according to Bloomberg, and has a net worth of about $27.3 billion (Bloomberg Billionaires Index). The Chicago Board Options Exchange Volatility Index, known as the fear gauge or the VIX, is up 13 percent.

China's Communist Party has pledged to increase the yuan's convertibility by 2020 and to gradually dismantle capital controls. Data this week reinforced a sluggish manufacturing sector.