Economists at China International Capital Corp. have published an 11-page rebuttal of hedge-fund manager Bass' assessment of China
Says Bass is getting it wrong in three main areas:
- Comparing a "vastly different" Chinese economy to that of Japan's in 1990
- Using the ratio between loans and economic output as a complete measure of leverage in China
- And by using a measure of foreign-exchange reserves that underestimates the true figure
"Although we do not share Mr. Bass's assessment of a violent debt-deflation cycle accompanied by severe FX depreciation in China in the near future, we acknowledge that China's current macro challenges are daunting."
You can read Kyle Bass' full explanation here
And Bloomberg's report on China's rebuttal here
Who are you going with?
At least his shirt is the right colour
