Kyle Bass, head of Dallas-based hedge-fund Hayman Capital Management, has a strong track record of picking tops in economic cycles, and he says a China hard landing is on the horizon.

Bass spoke to Fortune at the Ira Sohn investing conference in San Francisco last week, and laid out his case for China’s impending banking crisis, saying that despite being bigger than the 2007-2008 financial crisis in terms of the assets at risk, the looming China hard landing will actually have less of an impact on the global economy.

China Hard Landing

Bass says China financial system is undercapitalized

When asked about China’s foreign reserves, Bass replied that a huge economy like China’s could burn through trillions relatively rapidly. He noted that many people point to thei $3.5 trillion rainy day fund thinking that they can weather any storm. Bass says this just isn’t true because “their banking system used to be 41 trillion RMB only eight years ago and now it’s 184 trillion RMB. They have $31 trillion of assets in their banking system. Their economy is $10 trillion.”

Bass goes on to argue: “My view is that China is an emerging market. Last time it had a non-performing loan crisis in 2001 to 2002, their losses got to over 30% of assets across entire banking system. My view this time, since they have grown 400% in eight years, is that they are going to have some loan losses. And emerging markets should never be higher than developed markets in [ratio of] bank assets to GDP. That is my conservative assumption.”

China hard landing will hurt, but probably no recession

As far as the impact of the China hard landing that he sees coming in the near future on the global economy, Bass says while it is likely to slash global growth by 50% or more, a recession in the U.S. is not likely.

He says: “If a third of the globe that’s been driving GDP growth slows down or goes negative, it doesn’t mean we are going into a surefire recession, but there is no chance of 2.5% real growth in the U.S. We think it’s going to shave 1.5% off GDP growth: That means that U.S. GDP could be up 0.5% to 1%, which is not good. Again, it’s not the end of the world. The U.S. already recapped its banks so we won’t have any banking problems. But we will have problems with growth.”

Bass also notes: “We don’t think the Chinese banks represent a systemic risk to U.S. banks.”

China will print bonds to get through crisis

When asked if China will get though its hard landing, Bass was sanguine, replying: “Yes. They can print bonds. China has the resources to recap banks and get through it like the U.S. did.”