Seeking Alpha

Chanos and O'Neill duke it out over China

  • The famously bearish-on-China Jim Chanos and Goldman's former sunny BRIC evangelist Jim O'Neill spent half an hour talking China at a Bloomberg conference last night.
  • China will have a "credit event" in five years, says Chanos; the Chinese economy will double in five years to $16T (the size of the U.S.), says O'Neill.
  • I can't really argue with being short the 'old' China," says O'Neill. Any slowing of the economy is being done deliberately in order to shift from a focus on investment to one on consumption. The "new" China will lead to investment opportunity.
  • If you think the macro picture in China is ugly, wait until you look at he micro picture, says Chanos.
  • Among the points the two agree on is mining - the industry will face difficulties. Those countries (Brazil and Australia come to mind) with exposure to iron ore will be in trouble over the next 12 months, says Chanos.
  • Brazil ETFs: EWZ, BRF, EWZS, BRAF, BRXX, UBR, BZQ, BRAZ, BRAQ, BRZS, BRZU.
  • Aussie ETFs: EWA, EWAS, KROO, AUSE, FAUS, Bonds: AUD, AUNZ, FXA, GDAY, CROC.
  • China ETFS: FXI, GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYPHAO, ECNS.
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