Jim Chanos: 'In Another 3 To 4 Years, China Is Going To Be Like Greece'

Famous short seller, hedge fund manager, and founder of Kynikos Associates, Jim Chanos, has been in the news lately for his severe criticism of the debt-fuelled growth of the Chinese economy. According to Chanos the way China is taking debt, it is not far from becoming another Greece.

Chanos was interviewed in the latest episode of Wall Street Week that goes on air this Sunday. In an excerpt from that interview, here is what he had to say about China.

China Is Not Turning

“So, here is, here is the problem and the problem is the credit story,” Chanos said. “And the Shanghai stock market, by the way is a very bad barometer. We are not short Shanghai. We have never been short [or long] the [A mart], the Asia market.”

He continued, “When I started looking at China, it was 3,500, it went to 1,900 and now it’s 4,300 and when it was at 1,900 nobody told me of this means, this is the end of China. It was just the Shanghai stock market, its retail market. Now that it’s at 4,300. Everybody is coming out [of the door] to say China is turning, it’s not.”

Soon To Turn Into Greece

On the exponential increase in debt being taken by China, Chanos said, "Chinese banking system is bloated and it’s basically taking out more and more leverage. That same ratio is now 300 percent[…] So, in 5 years they have more than doubled their debt to GDP and I joke to my Chinese friends, but somewhat [have] seriously, another 3 or 4 years they are going to be like my homeland Greece. They are going to be a 400 perecent.”

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