Well, this one might give Jim Rogers and other China bulls some heartburn. Jim Chanos explains all the ways China might be screwed, and some of them are serious problems. We don't normally associate China with excessive debt (unless they're the buyer), but it turns out by some measures that they're even worse than Greece. Their housing market is hitting the skids, and high profile frauds like Sino Forest aren't instilling investor confidence. Could this be where the China bubble bursts?
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You should check out this small documentary about the Chinese property bubble. This is not sustainable.
there are tons of challenges in china, but i think its in much better shape than us.
If china catches a cold, europe gets gangrene.
Even though Chanos and Henry were both right at the result, the cause is vastly different. Both of them imagined a bubble burst; but instead, it was a soft landing downturn engineered by Chinese government's five year policies.
Luck.
He's been short China for sometime...wondering how his funds are doing?
1) Shorting developers and Chinese banks might be profitable short term. 2) However, saying China is going to burst is very ignorant statement. 3) Housing price comes down gradually is inevitable in the short run, but in the mid to long run, internal demand for housing remain strong. 4) Chinese local or government debt were hold by Chinese citizens and corporations. Looking at Japan, 200% debt to GDP, they are still borrowing at 1-2 percent. Yes, it's European kinda of number, but a different scenario. High domestic saving rate changes a lot of things. 5) Chinese government has capital control and control on exchange rate, so capital can't get in or out freely. This will give them time to tackle the challenges. Plus IMHO, shorting a major economy is never a good idea these days.
All in all, he just picks out individual facts without analysis them in bigger context. He is just trying to get others on board with him to short those stuff. Not unreasonable, if he already have a position in them.
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