Jim Chanos: China's Economic Growth Path Is Unsustainable (CNBC)

Jim Chanos (Source: CNBC)
Famed short seller Jim Chanos, who runs the $6.7 billion hedge fund Kynikos Associates (went short Enron before it collapsed), was on CNBC yesterday. If you're a hyper-bull on China and "resource economies" (Brazil, Australia and Canada etc), you might want to take his view into consideration. Watch the video after the jump.

"Well, we have what we think is an unsustainable growth path for china. They are growing on the back of investment, and specifically real estate construction. So the consumer as a percent of China's economy is actually dropping, Maria. Net exports, are also dropping interestingly enough. All of the slack and then some is picked up by construction. Particularly and most concerning, high-rise construction of offices and condos in the tier one, tier two and tier three cities. Fixed asset investment including land, according to the Chinese, is now 70% of their economy. And to put that in perspective, the asian tigers in the mid-90s, that grew so fast and then blew up, had a number about half that. About 30% to 35%. So China has embarked on something almost unprecedented here."

Related blog post (4/25/2011): "China Has 64 Million Vacant Apartments, Shanghai Property Index Near Inflection Point (000006.SS Charts), Andy Xie On Inflation"




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