China’s debt-to-GDP ratio of nearly 300%# Stock
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China could be the next Greece and its debt woes may even exceed the
European country’s in the next few years, predicts prominent hedge-fund
manager Jim Chanos of Kynikos Associates.
“I joke to my Chinese friends, somewhat half-seriously, another three-four
years they are going to be like my homeland Greece,” said Chanos in an
interview, which will air this weekend on Wall Street Week, a syndicated
business-news show hosted by Anthony Scaramucci, co founder of investment-
management firm SkyBridge Capital.
The perennial China bear pointed to China’s debt-to-GDP ratio of nearly 300
% and projected that the ratio is likely to balloon to 400% over the next
few years. Here’s an excerpt from the interview:
“The problem is the credit story,” Chanos said. “China’s banking system
is bloated and it’s basically taking on more and more leverage.”
Chanos declined to elaborate further when contacted for comments but he has
been an unabashed critic of China’s debt-fueled economic growth and has
been sounding alarm bells of possible hard landing for the world’s second
largest economy for several years. A so-called hard landing can refer to a
rapid economic slowdown that occurs typically as a government’s central
bank is attempting to tighten fiscal policy and combat inflation.
China’s total debt hit $28.2 trillion in 2014, equivalent to 280% of its
gross domestic product, according to The Wall Street Journal.
Chinese monetary officials earlier this month lowered interest rates to
combat a worse-than-expected economic slowdown as companies and governments
struggled under heavy debt. China’s GDP rose 7% in the first quarter,
slowing from the 7.3% growth in the fourth quarter, the National Bureau of
Statistics said in April.
The full interview will be broadcast this Sunday on Fox Broadcasting Company
stations. Scaramucci’s SkyBridge Media LLC., an affiliate of SkyBridge
Capital, also produces Wall Street Week.
http://www.marketwatch.com/story/why-jim-chanos-thinks-china-co
European country’s in the next few years, predicts prominent hedge-fund
manager Jim Chanos of Kynikos Associates.
“I joke to my Chinese friends, somewhat half-seriously, another three-four
years they are going to be like my homeland Greece,” said Chanos in an
interview, which will air this weekend on Wall Street Week, a syndicated
business-news show hosted by Anthony Scaramucci, co founder of investment-
management firm SkyBridge Capital.
The perennial China bear pointed to China’s debt-to-GDP ratio of nearly 300
% and projected that the ratio is likely to balloon to 400% over the next
few years. Here’s an excerpt from the interview:
“The problem is the credit story,” Chanos said. “China’s banking system
is bloated and it’s basically taking on more and more leverage.”
Chanos declined to elaborate further when contacted for comments but he has
been an unabashed critic of China’s debt-fueled economic growth and has
been sounding alarm bells of possible hard landing for the world’s second
largest economy for several years. A so-called hard landing can refer to a
rapid economic slowdown that occurs typically as a government’s central
bank is attempting to tighten fiscal policy and combat inflation.
China’s total debt hit $28.2 trillion in 2014, equivalent to 280% of its
gross domestic product, according to The Wall Street Journal.
Chinese monetary officials earlier this month lowered interest rates to
combat a worse-than-expected economic slowdown as companies and governments
struggled under heavy debt. China’s GDP rose 7% in the first quarter,
slowing from the 7.3% growth in the fourth quarter, the National Bureau of
Statistics said in April.
The full interview will be broadcast this Sunday on Fox Broadcasting Company
stations. Scaramucci’s SkyBridge Media LLC., an affiliate of SkyBridge
Capital, also produces Wall Street Week.
http://www.marketwatch.com/story/why-jim-chanos-thinks-china-co
