A country whose rapid rise was hiding massive flaws: grossly inflated real estate prices, irresponsible construction lending, massive overbuilding, a banking system larded with bad loans, and unreliable government data. Fitch Ratings weighed in this week saying that China's banks face the greatest "bubble risk" of any Asian country.
That is a lot of potential trouble. However the article goes on to suggest that the autocratic Communist Party may be able to ameliorate some of the potential difficulties via the ability of a command economy to allocate resources arbitrarily.
On our recent visit to China, I was struck by the extent to which the China of today reminds me of "Japan, Inc." before the Japanese bubble burst. Chanos' description of China today, noted above, would have fit the bubble years in Japan very nicely.
