From Distressed Volatility:

Jim Chanos, founder of hedge fund Kynikos Associates, told Bloomberg's Carol Massar yesterday that he's still very bearish on China's property market and banking sector. He's been bearish on China for a few years now and now it's starting to move his way.

The question now is, does China see a soft or hard landing? Chinese equity indices are breaking down as we speak and China's 5Y CDS (credit default swap) just made a new high...

Jim Chanos: "Well, the Chinese government balance sheet directly does not have a lot of debt, it's de minimis. But the fact of the matter is, the state owned enterprises and the local governments, and all the other ancillary borrowing vehicles, have lots of debt, and it's growing at a very very fast rate. And the assumption is, is the state stands behind all this debt. Well if we look at it on that basis, and Fitch and others have done so too, we see that debt in China, implicitly backed by the Chinese government, probably has...

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