china economy collapsed

The famous short seller Jim Chanos has been making waves lately, saying he thinks China is in a bubble and ready to collapse in 2010. He argues that credit can be simple real estate and stock prices shoot up. He also says the Chinese government is cooking the numbers to 8% growth in gross domestic product products if China really can not keep growing if the rest of the world was hit shows as hard by the financial crisis.
Chanos called it directly to Enron and Tyco (TYC - news - people) before they collapsed. He is no lightweight observer of the economic scene. He is wrong about China. For once I agree with the famous investor Jim Rogers, who founded the Quantum Fund with George Soros. He says China is not in a bubble and adds that he finds "it interesting that people who do not spell out China 10 years ago could now experts on China."

Betting against China in 2010, a serious mistake for investors and companies alike. Here are three reasons why Chanos is wrong, and Rogers is right about the strength of the Chinese economy: 
Chanos' first error is his belief that China's real estate sector rose in 2009 because of speculation triggered by a relaxation of credit from Chinese banks. Loans in China doubled 1350000000000 $ in the first 11 months of 2009. Real estate prices rose sharply across the country and almost doubled in cities such as Shenzhen.Chanos called a bubble - "Dubai 1000 times - or worse - it could lead to fallout as the subprime mess in the U.S. 
However, there are important differences between China's real estate and consumer finance markets and the U.S. and Dubai, Chanos she says. First, the purchase of residential real estate, consumers in China have increased by 30% before a mortgage.For a second home, they have to put 50%, no matter what their net worth. Therefore, China is not the reckless behavior of consumers in the U.S., where people encountered were with bad credit from huge loans from Countrywide with no money down, or purchase of 10 flats with no deposits in the hope that they reflect in a few months. People who buy houses who can afford it. Betting against China in 2010, a serious mistake for investors and companies alike. Here are three reasons why Chanos is wrong, and Rogers is right about the strength of the Chinese economy: Also, mortgages are not on edge and packaged and securitized by the likes of Citigroup (C - news - people) and Bank of America (BAC - news - people). are required instead of the original mortgage lender, collapsed the way they were in the U.S. before financial innovations and the lack of regulation, the old rules.