Chanos on China: Economic Slowdown ‘Worse Than You Think’

Renowned short-seller Jim Chanos, who has been bearish on China’s economy for several years, has a disturbing insight on China: “It’s worse than you think”. He told CNBC: “it’s worse than you think”.

He spoke as worries of a deepening China economic slowdown intensified on Friday after a private survey showed the factory sector shrank at its fastest rate in nearly 6-1/2-years in August, hammering global stocks and commodity prices.

“Markets go down. I have no idea where we are or if this is even a correction”.

SolarCity Corp (NASDAQ:SCTY) will need a miracle to arrest the crash in its share price after long time bear, Jim Chanos revealed that he is shorting the stock. Whatever you might thin, it’s worse. We’ve gotten a little complacent as it went up last few years.

“People are beginning to realize the Chinese government is not omnipotent and omniscient”, he said. “The way they handled both the runup of their stock market, the panic responses, the devaluation, non-devaluation, the mixed signals from different ministries…have given investors pause”, he said. He added many investors “don’t have a clue”.

“Solar is a transformational industry, and it’s going to be a great thing and part of it is because cost for everything keep coming down”, Chanos said.

He added that investors should forget about the performance of the Shanghai composite (Shanghai Stock Exchange:.SSEC), but instead focus on how declining GDP growth and the Chinese consumer could affect American companies with exposure to the country. We’ve been bears because of the credit situation in China. He’s a strong leader, he’s a nationalist.

Chanos said China was open for business under the previous regime, but the case is not the same under Xi Jinping’s regime. The index was down 4.3% earlier today.