Not that it's a surprise, but still. While the mainstream view is centered on a growing China, it's interesting to see a few big money players betting the opposite. As impressive as the growth has been, it remains a mystery for some (including me) where China is selling its exports since buyers have dramatically slowed down buying. Improved, yes, but it's hardly back to pre-recession buying rates. The other troubling factor is the Chinese communist government who has a long history of cooking the books and encouraging that practice such as during the Cultural Revolution.
As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China's hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like "Dubai times 1,000 -- or worse," he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.
"Bubbles are best identified by credit excesses, not valuation excesses," he said in a recent appearance on CNBC. "And there's no bigger credit excess than in China." He is planning a speech later this month at the University of Oxford to drive home his point.
