This morning Jim Chanos stopped by CNBC and talked about his short position against the Chinese real estate market. He pointed out that China’s economy, unlike the myth that is bandied about, is mostly driven by construction and not by internal consumption or exports. According to new data Chanos said that China’s construction industry accounted for 70% of GDP.

Compare that with the peak levels in the US and UK back in 2005-2006 at 16%. As well, on a per capita level, China is building 2.5 times as many new homes as the US built at the housing peak in 2005. There are also some strange differences. For example, even in this hot property market, no one wants to buy a previously owned home. Everyone prefers to buy a brand new house. This is why you have whole buildings sitting empty, as “investments”.

Chanos also refers to the statistic that…

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