Jim Chanos Debates China with Stephen Roach

Jim Chanos photo via Insider Monkey (CC BY-ND 2.0)

Jim Chanos Debates China with Stephen Roach

Jim Chanos was on Bloomberg TV earlier Today. Jim Chanos mostly focused on his favorite country, China. Chanos had a gentlemanly debate with Stephen Roach on the second largest economy.

Chanos has noted on several occasions that China has ghost cities. In response, Roach argued that China is a huge country and as it grows the country is bound to make some big mistakes. However, the ghost cities do not prove that China has a housing bubble about to burst. Roach called some of the reporting in the US about China “sensationalistic”.

On the topic of growth Chanos commented that there is much reason to question the official economic numbers coming out of China. He notes that consumption as a percentage of GDP is still dropping, which is a bad sign as many believe China must boost spending as a percentage of GDP. Additionally, China is borrowing more and more, but the growth is slowing.

During the debate Chanos notes that he has asked students where they would want to start a business? He notes that they always answer the US, even though many of the students are not from the United States. He notes that intellectual property theft, lack of court protection and other issues make starting a business difficult in China.

Many other parts of the debate were insightful.

The Bloomberg video can be viewed below:

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