George Soros is worried about China, and we should take note. The hedge fund boss, who built his fortune betting on the world's money markets, is concerned that 20 years of rapid growth is about to run out of steam.

Soros, who famously bet against the strength of the pound in the European exchange rate mechanism and won during 1992's Black Wednesday debacle, will be a prominent figure at the World Economic Forum in Davos later this month, when policymakers and business people debate how to foster global growth.

In the Square Mile, a brief glance at the stock market shows the impact of a slowdown in Chinese manufacturing output last month – and the fear that this will become protracted. The FTSE 100 is down 30 points since the new year break. It includes mining companies such as Rio Tinto and Anglo American, which have strong links to the Chinese economy. Signs that the world's second-largest economy is slowing have caused the price of many commodities to fall, and helped break a 12-year bull run for the gold price. (China consumes around half of the world's iron ore and coal, and buys more than a third of its base metals.) Beijing's move to cut back on corn imports made the grain the worst-performing commodity last year, as it fell almost 40%.

Predictions that China's economy lost momentum in the final quarter of last year were underscored by figures showing that the manufacturing sector grew at a slower pace in December as export orders weakened. Official figures can say whatever the Chinese authorities want them to say, but there is widespread agreement that the economy is suffering a longer-term slowdown.

Mark Williams at thinktank Capital Economics said the news that China has a $3 trillion (£1.8tn) local government debt mountain would fuel the fear: "Activity among large firms has turned down again and is likely to cool further as policymakers rein in local government debt. We therefore expect China's economy to slow again this year."

Soros bluntly states that three years of worrying over the eurozone should give way to worrying about China. It's not that he believes a solution has been found to the debt mountains in parts of Europe; it's just that he thinks the euro problem has reached a plateau while China could be on the skids.

He said: "The major uncertainty is not the euro but China. The growth model responsible for its rise has run out of steam."

Until recently China has thrived by restricting households' spending, effectively forcing them to save. The savings are channelled into industrial production.

Foreign exchange built up in the boom years has mostly been invested in international expansion – in Africa and in parts of Asia neglected by a previously aloof Japan.

The financial crisis showed the weakness in the idea of becoming the workshop for the world when that world couldn't afford to go on buying. To keep the wheels turning, local authorities and other government agencies were allowed to borrow.

Last year the Chinese leadership said it recognised that plan was flawed, and public sector debt needed to be cut. But when the economy slowed dramatically after borrowing was restricted, the policy was quickly reversed. The subsequent boost looks shortlived, even if China has billions of dollars in foreign exchange reserves to soften any economic blow.

Soros said: "China's leadership was right to give precedence to economic growth over structural reforms, because structural reforms, combined with fiscal austerity, push economies into a deflationary tailspin. But there is an unresolved contradiction in China's current policies: restarting the furnaces also reignites debt growth, which cannot be sustained for much longer than a couple of years."