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Is China Following The Path of The Soviet Union? Jim Chanos Vs. Mohamed El-Erian

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Apr 24, 2011
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This is a very interesting debate that I found recently. Mohamed El-Erian and Jim Chanos were arguing over whether China is akin to the Soviet Union before its collapse in the late 80s/early 90s.The debate took place on Squakbox a week and a half ago.

Jim Chanos compared China to the Soviet Union. Chanos commented that the Soviet Union grew 6-8% for nearly 40 years after the end of World War II. This is similar to China, which has grown at rapid rates for close to 30 years. Chanos thinks that everyone now agrees there is a bubble bursting in China the question is whether it will be a soft or hard landing.

El-Erian does not like the analogy. He says the Soviet Union was closed to the free market, unlike China, which is "tested" every day on the free market. El-Erian agrees that the bubble is a problem but thinks there will be a soft landing. However, he thinks that future growth in China will be slower than in the past.

They also discussed other topics like healthcare, and alternate energy.

The full video can be found below:

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