The bubble in China's real estate is unprecedented and companies exporting for the country's construction sector should be watched carefully, James Chanos, president and founder of Kynikos Associates, told CNBC Monday.
"We are not calling for an impending crash of China or of the Shanghai stock market, but in particular the bubble that has been blown up in real estate both commercial and residential as well as other forms of fixed asset investment in china is unprecedented," Chanos said.
"I do see all of the signs of a credit induced real estate bubble that i think is going to be a doozy," he added.
He said there are about 30 billion square feet of space in construction only in the commercial property sector.
If the bubble were to burst, it would hurt the building materials sectors and the commodity plays in the Western world, the sectors where demand depends on the Chinese construction market, according to Chanos.