Jim Chanos on China: ‘The Cracks are Spreading’
Jim Chanos sees a slowdown in residential property sales coupled with declining prices. Real estate companies are starting to close down. He argued on CNBC yesterday that this means the first signs of a Chinese slowdown are showing.
Video below.
China is definitely slowing down, as I have discussed briefly here: https://goo.gl/m21Uk
The problem is that property prices are only starting to correct, if there is any correction at all. Inflation also remains high. In the near-term, the People’s Bank of China will remain its tightening stance, but that will increase the risk for hard-landing.Now, we are already seeing some bankruptcies of small and medium size businesses in China. Some of them can’t get any credit from banks, such that they are going for alternative financing which can charge almost 100% per annum in some extreme case, pretty much a loan shark.
Not looking too good right now.
China is definitely slowing down, as I have discussed briefly here: https://goo.gl/m21Uk
The problem is that property prices are only starting to correct, if there is any correction at all. Inflation also remains high. In the near-term, the People’s Bank of China will remain its tightening stance, but that will increase the risk for hard-landing.
Now, we are already seeing some bankruptcies of small and medium size businesses in China. Some of them can’t get any credit from banks, such that they are going for alternative financing which can charge almost 100% per annum in some extreme case, pretty much a loan shark.
Not looking too good right now.
If you add in the story the other day about soya buyers using purchases to get trade credit funds it sounds like China is having a serious credit crunch of its own. China needs to find a way to regulate lending that does not hamper small businesses and growth yet stops property speculation which is unproductive and akin to the problems elsewhere.
If you add in the story the other day about soya buyers using purchases to get trade credit funds it sounds like China is having a serious credit crunch of its own. China needs to find a way to regulate lending that does not hamper small businesses and growth yet stops property speculation which is unproductive and akin to the problems elsewhere.