By Sam Jones, Alexandra Stevenson and Robert Cookson
Published: October 15 2010 19:43 | Last updated: October 15 2010 19:43
Few hedge fund managers would bother to travel to China with a handycam to provide investors with video evidence of the Chinese economic miracle.
Fewer still would have the gumption to claim the miracle was a sham – and conspicuously loiter outside the gleaming new towers of Chongqing or Guangzhou to try to prove it on tape: no one goes in or out of the empty buildings there.
But Eclectica’s Hugh Hendry, has long been, in his own words, on the “loony fringe” of the hedge fund world. His video, which can be seen on YouTube, was the genesis of a contrarian trade on which he and a small band of other investors, among them the redoubtable short-seller Jim Chanos, are staking their reputations: being short China.
Their pessimism is not shared by many. In its six trading sessions this month, the Shanghai Composite share index, mainland China’s corporate barometer, has risen 12 per cent. On Friday, it rose 3.2 per cent to 2971.16, its highest in nearly six months.