The rampant growth of credit in China appears to be forming a bubble, Jim Chanos of Kynikos Associates told CNBC. Chanos, who has been bearish on China, said that its economy has been deteriorating. "I actually think it's gotten worse." He said that credit was to blame.
"New credit outstanding jumped by $1 trillion U.S." he said, adding that China's economy was equivalent to $8 trillion in U.S. dollar terms. "So, on an annualized rate, that's 50 percent of GDP, new credit creation. "To put that in perspective, the total new credit globally went up by a trillion and a half in the first quarter. China was $1 trillion of that, yet it's only 10 percent of the world economy."
Chanos said that the trend was a red flag.