More from Chanos on the Chinese property bubble
Given my post on Jim Rogers’ doubting Chanos’ knowledge about China, I thought it appropriate to post the latest Chanos interview on the China property bubble.
This call by Chanos is really setting us up for some seriously entrenched camps of pro-China bulls (like Rogers)against China sceptics (like Chanos, but also like Andy Xie). Is this a repeat of the U.S. property bubble debates of 3 and 4 years ago? It sure seems that way right now. Jim O’Neill of Goldman Sachs, like some others, is latching on to Chanos’ quip in which he called China “Dubai times a thousand.” See how he answers O’Neill’s criticism below. I would love to hear Stephen Roach’s take on Chanos’ property bubble call. I certainly believe there is a bubble – and, since all bubbles end in tears, this one will too.
The larger question is what effects will this have on Chinese and global economic growth over the medium-term. Chanos says he’s agnostic right now. But, clearly, a burst bubble can’t have positive effects. At a minimum, it would delay any increases in Chinese domestic consumption. Therefore, a burst bubble may gear Chinese policy that much more toward exports.