Jim Chanos China

Jim Chanos China

Jim Chanos Foresees Economic Collapse in China

As a hedge fund manager, Jim Chanos has made a name for himself--and a lot of money--predicting that Enron and other firms or industries were too good to be true.  Now, Mr. Chanos claims that a much larger investment area is a dangerous myth, China.  He has been sounding the alarms that China's economy is nearing a major crash.  Many experts have touted China's growth rate (upwards of 8%) to show that China is a powerful economy which will only grow more with a $586 billion government stimulus plan.  But Chanos remains a skeptic and worries that China is the next big bubble.
As America’s pre-eminent short-seller — he bets big money that companies’ strategies will fail — Mr. Chanos’s narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers.
Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell cement, coal, steel and iron ore.
Mr. Chanos, 51, whose hedge fund, Kynikos Associates, based in New York, has $6 billion under management, is hardly the only skeptic on China. But he is certainly the most prominent and vocal.  Read more

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