China's Economic Bubble

China's GDP growth, according to some, might be inflated.  Jim Chanos is a billionaire hedge fund investor who profits from the decline of companies.  He accurately predicted, and profited from, the downfall of companies like Enron, Tyco and Boston Market.  Now his next target?  China, the largest conglomerate in the world.

China is claiming GDP growth of 8-10% a year.  And today they announced that they expect GDP growth to be at 10.2% in 2010.  Figures like that among other things is making investors like Chanos skeptical that this is a real economic growth or just an economic bubble.  He believes that growth numbers like this is driving foreign investment capital from flooding in.  And this on top of China's half a trillion dollar stimulus investment is causing investors like Chanos to believe that there might be a bubble looming in China.

He has a good point.  How can China's economy grow this fast unilaterally while the world economy is growing at a snail's pace or not growing at all.  Basically, who's going to buy all the stuff that China's producing?  That is the big question.  Here is the article from the New York Times about Jim Chanos and the China Economic Bubble.