Many China bears, including closely watched short-seller Jim Chanos, have warned that economic numbers from the Chinese government dramatically overestimate growth.
But Robert Barbera, co-director of Johns Hopkins Center for Financial Economics, argued on CNBC on Monday that China's economy is actually contracting.
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"If you take the top 10 trading partners with China and you add up their exports to China, you've got data that the Chinese government doesn't get to put their hands on," he said. "If you look at that data, what you've actually got is about minus 4 percent year-over-year."
"China may not even be growing at this point," said Patrick Wolff, founder and managing partner of Grandmaster Capital, a hedge fund launched in 2011 with seed money from billionaire investor Peter Thiel.
The statements are in sharp contrast to China's official assessment of an annual growth rate of 7.5 percent in the second quarter, which marked the ninth slowdown in the past 10 quarters and a dip to the low end of the Chinese government's economic growth target for 2013.
"The current Chinese premier has been quoted in WikiLeaks as saying he doesn't believe the GDP numbers [there]," Wolff said. "People should forget the [Chinese] GDP numbers entirely. They're nonsense."
Wolff, a chess grand master turned investment manager, laid out three China scenarios in a "Squawk Box" interview Monday, starting with his base case: "I think you get severe recession and financial crisis in China.
"A bear-case scenario is the same thing, only worse, and then you get massive capital flight and political instability," he said. "Maybe something like Tiananmen Square or worse."
Wolff finished with his bull case: China goes into recession but comes out better in the long run as a result of enacting painful structural reforms.
"You might have a freer, more open, more capitalistic economy," he said, adding that he's not optimistic about that.
Neither is Chanos, founder of hedge fund Kynikos Associates, who first raised concern about China in 2009. At the CNBC-Institutional Investor Delivering Alpha Conference earlier this month, he warned on "Squawk Box" that China's credit bubble is getting "worse and worse and worse."
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One of the reasons China's overnight interbank offered rate "keeps lurching upward" is because the banks don't have capital, Wolff said. "They don't have capital because they're not getting paid back on their loans. They aren't getting paid back on loans because the companies aren't making money. If you actually sit down and look at the finances, a lot of these Chinese companies—what really is striking is they may report accounting profits, but they're not making money."
And that may be just the beginning, according to economist Barbera. "If you look back at the Great Recession for the U.S. and Europe … a lot of us thought at that juncture China would discover what it's like if you are tied to the global business cycle."
That didn't happen because it "created this wild infrastructure boom," he pointed out, adding that "one could make the case that postponement actually spread out the full hit of the Great Recession, and they're in the midst of it now."