Legendary hedge fund manager Jim Chanos is more bearish on China these days.
The most outspoken Sino-Skeptic is Wall Street short-seller Jim Chanos, who over the past several years has placed negative bets on the stocks of major Chinese banks, real-estate developers, and mining concerns, like Australia’s Rio Tinto (ticker: RIO) and Brazil’s Vale (VALE), which are major suppliers to the Chinese fixed-asset orgy. Never one to mince words, Chanos contends that China is headed for a hard landing of epic proportions because of its shaky financial system and an imminent collapse in its property market, which undergirds the entire economy. “I’m being conservative when I say that the coming bust in China’s real-estate market will be a thousand times that of Dubai,” he told Barron’s.
The argument is nothing new for Chanos. He first revealed his bearish position on China in 2010. Most people think he was either wrong or early. However, Chinese shares have underperformed the broader market over the last two years.