Investor and philanthropist George Soros forecast in Budapest on Friday that China would emerge as a big winner of the global financial crisis.

Soros called on Chinese leaders to "rise to the occasion" and take an active role in the creation of a new multilateral financial order urgently required to reinvent the "broken international financial system."

Soros also warned that "the worst financial crisis since WWII" may not be over.

The Hungarian-born billionaire sounded a pessimistic note throughout the week and said that those who believe the global economy is stabilizing are wrong.

In the last of a week-long series of lectures on capitalism and the global financial crisis at the Central European University in the Hungarian capital, Soros spoke of disarray in the international financial system and confusion in the political arena.

Soros urged greater international cooperation and called for a reorganization of the world order to prevent a total breakdown.

"The total freedom of financial capital to move around internationally has proved to be a source of instability and needs to be curbed. A new grand bargain is required," he said, referring to the Bretton Woods conference at the end of WWII which led to the establishment of institutions such as the International Monetary Fund.

"Global markets need global regulations, but the regulations that are currently in force are rooted in the principle of national sovereignty. A new multilateral system needs to be invented that would serve the interests of both the United States and China and of course the rest of the world," he said.

"Such an institution could then decide how to treat financial institutions that are too big to fail and would consider new rules to control capital movements," Soros said.

The reorganization of the prevailing world order should also extend beyond the financial system and involve the United Nations, especially membership of the Security Council, Soros argues, if progress is to be made in resolving issues like global warming and nuclear proliferation.

"The process needs to be initiated by the United States but China and other developing countries ought to participate in it as equals. They are reluctant members of the Bretton Woods institutions which are dominated by countries that are no longer dominant. The rising powers need to be present at the creation of the new order to ensure that they will be active members of it. Hopefully the Chinese leadership will rise to the occasion. It is no exaggeration to say that the future of the world depends on it."

Soros believes in the long-term the United States stands to lose the most from the recent turmoil and China is poised to emerge as the greatest winner.

"In the United States, the crisis was an internally-generated event leading to the collapse of the financial system, while China was largely insulated from the financial crisis although there was an external shock to exports. The new world order that will eventually emerge will not be dominated by the United States to the same extent as the old one. China may be able to take its place to some extent," Soros said.

It is also in China's interests, however, to submit to a new multilateral system, according to Soros.

"In order to continue rising China must make itself more acceptable to the world, move towards a more open society, combining an increased measure of individual freedom with the rule of law."

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