Economics
China Debt Surge Echoes Japan Slowdown Pattern, Chanos Says
- Debt relative to GDP repeating pattern before lost decade
- China has made `missteps' in handling stock market meltdown
Jim Chanos, founder of Kynikos Associates Ltd.
Photographer: Scott Eells/BloombergThis article is for subscribers only.
China is on a path similar to the one that preceded Japan’s lost decade in the 1990s as the country’s debt level grows twice as fast as its economy, according to Jim Chanos, the hedge fund manager who predicted the 2001 collapse of Enron Corp.
“We have an economy addicted to credit,” Chanos, founder of Kynikos Associates LP, said during a panel discussion on China in New York Tuesday. While the country doesn’t appear to be facing an “imminent collapse,” it is on a trajectory similar to the one Japan was on before its asset-price collapse in 1991 “but on steroids,” he said.