Hedge fund manager Jim Chanos has been garnering quite a bit of attention the past few months talking about the growing risks in the Chinese economy and the danger it presents to western countries that are banking on China's growth to carry them through a secular western slowdown.

Chanos, who predicted the fall of Enron and the financial crisis of 2008, says China is the next bubble to burst and is 1000 times worst than Dubai. He is looking at short opportunities there and in countries (like Australia and Canada) that ship large exports of commodities to China.

See his CNBC interview today (sadly CNBC seems to be preventing embedded clips now too, so you have to go to the site to find it) as well as this Bloomberg clip of his recent keynote presentation in England here (unfortunately the sound quality is poor, but the content is worthwhile).

Here is the Krugman article from 1994 The Myth of Asia's Miracle that Chanos calls "brilliant' in his keynote.

A key take away from all of this is an important understanding: China starts with its target GDP and then drives government spending and liquidity to meet the target. Presently China is making up an unprecedented 60% of its GDP target via forced fixed asset investment. Their growth story is not about end demand. This has created enormous over-capacity and over-supply across most sectors. The situation is not self-sustaining or durable and those banking on it continuing are doing so at ballooning financial risk.