Billionaire investor George Soros said China's economy is heading for a hard landing and will contribute to global deflation.

"A hard landing is practically unavoidable," Mr Soros said in a television interview at the World Economic Forum in Davos. "I'm not expecting it, I'm observing it."

Soros nearly doubled down on his bearish bet, with his firm holding "put" options on 4 million shares in an exchange-traded fund that tracks the S&P 500 at the end of the second quarter. Credit:Simon Dawson

Soros said while China has resources to manage the situation, the slowdown there has spillover effects on the rest of the world. The investor said he has placed bets on further falls for the Standard & Poor's 500 Index, which is down about 8.5 percent for the year, and advised that it's still too early to buy equities, echoing comments from other top investors this week who said they don't see a bottom yet for markets.

Soros said he that at the end of last year he also bought US government bonds, shorted raw-material producing countries and bet that Asian currencies would fall against the dollar.