Global governance is faltering and China's grip on the global economy is getting tighter, says philanthropist and former hedge fund manager George Soros.

Mr. Soros chose not to attack the U.S. for revving up its printing presses in its new round of quantitative easing, focusing instead on China's foreign exchange policies. Speaking at a gala hosted by the Canadian International Council in Toronto, Mr. Soros said China's devalued currency manipulates global trade and distorts the global economic recovery.

“[President Barack] Obama got the short end of the stick,” Mr. Soros said. Not only is the President getting attacked within his own country, foreign governments are against him even though China's policies are just as significant. In Mr. Soros's view, both countries are at fault, yet he added that both of their policies can work together, if used in moderation. “There ought to be some kind of balance or compromise between them,” he said.

Mr. Soros did not let the U.S. off the hook, noting that quantitative easing has “harmful side effects.”

“History shows that it gives rise to asset bubbles and it disrupts the foreign-exchange markets,” he said.

Mr. Soros devoted much of his talk to China because the country's rapid rise is taking place at the exact same time that the U.S. is losing its global economic dominance. “There is a really remarkable, rapid shift of power and influence from the United States to China,” Mr. Soros said, likening the U.S.'s decline to that of the U.K. after the Second World War.

Because global economic power is shifting, Mr. Soros said China needs to change its focus. “China has risen very rapidly by looking out for its own interests,” he said. “They have now got to accept responsibility for world order and the interests of other people as well.”

Mr. Soros even went so far as to say that at times China wields more power than the U.S. because of the political gridlock in Washington. “Today China has not only a more vigorous economy, but actually a better functioning government than the United States,” he said, a hard statement for him to make because he spent much of his life donating to anti-communist groups in Eastern Europe.

Looking forward, Mr. Soros said global governance is a pressing concern, but it is hard to implement. “Whereas globalization and deregulation spread like a virus, regulation is extremely difficult to achieve on an international scale,” he said.

“The world order as we know it is turning into disorder,” he added. At first “the G20 looked like the new central area of cooperation, and it actually did perform at the initial conference,” he said, “but ever since then opinions have been pulling it apart and in Seoul I think that process was taken a step further.”

Mr. Soros also touched on the unravelling European debt crisis. Although some people are surprised that Europe is still in trouble, he is not shocked. “The current situation can only be understood as a continuation of the financial crisis,” he said. “We are not out of the woods.”

But he did note there could be even more problems ahead because Germany is starting to dominate fiscal policy.

“Effectively Germany is imposing on the other countries a policy that has done very well for Germany” but not for the other governments, he said.

Mr. Soros was in Toronto to accept his award as Globalist of the Year from the Canadian International Council, which is chaired by Research in Motion co-CEO Jim Balsillie.

Mr. Soros recently opened the Institute for New Economic Thinking in Cambridge, England. to broaden economic thought coming out of the financial crisis.