Mike Segar / Reuters
In a recent interview with New York Times' op-ed columnist Joe Nocera, Chanos shared the exact moment when he decided to look into betting against the country.
It happened around the time Kynikos Associates was looking at why commodities companies were making so much money. Chanos knew it had something to do with China, so he had some folks at his firm examine why China was buying all this iron ore, copper, and aluminum.
"I'll never forget the day in 2009 when my real estate guy was giving me a presentation and he said that China had 5.6 billion square meters of real estate under development, half residential and half commercial," Chanos told Nocera.
That 5.6 billion square meters number made Chanos do a double-take.
"I thought for a second and said: 'Well, wait a minute, Alex. You mean 5.6 billion square feet. Because 5.6 billion square meters is roughly 60 billion square feet,'" Chanos elaborated in a follow up interview on NPR's Roben Farzad's "Full Disclosure."
"He turned to me, 'I know. I triple checked the numbers. It's 5.6 billion meters."
What was so striking to Chanos is half of that number is office space. In other words, 30 billion square feet of office buildings.
"That equals a five-by-five square foot cubicle for every man, woman and child in China," Chanos said on the show.
"It just struck to the madness of just how much of the economy was a construction site. And that's when we started to dig in and look at the numbers."