Andy Xie is an independent economist based in Shanghai, and the former Morgan Stanley star chief Asia-Pacific economist. Andy Xie is famous in the investment circle for his contrarian and provocative views. Xie has a strong view that China is in the process of creating one of the biggest bubbles in history, especially in real estate market. According to Xie, the housing price in China has gone too far away from its intrinsic value way beyond the affordability of Average Joe on the street. To make matters worse, Xie doesn’t see central government’s recent effort to curb housing price effective at all. On the contrary, Xie sees the local government ready to unleash another fresh round of property inflation (Read Article from Caixin) in the near future. By the law of economy, bubble is set to burst, by when the economy will be hit hard and people will suffer.

Despite Xie’s seemingly exaggerating view, I sideline with him that the property bubble in China seems in the formation without a single doubt. The question is when the D day would come, or maybe it will never come as the bubble could be ‘grown’ away given the super bullish outlook of China’s growth prospect. In fact, the China ‘growth’ story is the most frequent, and probably the only robust reason that China Bulls cite when they talk about asset prices in China, be it equity or property. After all, China has delivered a phenomenal story in the past thirty years, which is unthinkable in the box of conventional economic theories. Continue (继续)

Jim Chanos is the president and founder of Kynikos Associates, a New York City Investment Company that specializes in Short Selling. In October 2000, Chanos started to research on Enron Corporation, and concluded that the management was overstating the earnings. Accordingly Chanos started to short the share of Enron. During the same time, Enron’s share price dropped from $90 to $1 within a period of 12 months.

In January, 2010, Chanos opinioned that there is a huge property bubble in China (Read Article from NYT) which might bust any time. According to Chanos, China’s property problem is ‘one thousand times of Dubai’ (Watch a video click of Chanos Presentation Here). The main reason for Chanos to be bearish on China is the excessive capacity that seems mounting in a few heavy industrial sectors such as steel, cement and construction. Some notable examples include an empty city in Ordos (Read Article from Chinatells) and huge idle production capacity of iron steel (Read Graph from Chinatells). Therefore China could be potentially a good candidate for Chanos’ short selling list. Continue (继续)