The popping of the Chinese real estate bubble has just begun, with the nation likely to experience the types of problems the U.S. has encountered over the past five years, hedge fund titan Jim Chanos told CNBC.
Chanos, head of Kynikos Associates, has been bearish all year on China, which recently has seen a slowdown in growth and officials taking pains to try to prevent the world's second-largest economy from cooling too much.
While he is not predicting any imminent crash, Chanos does think investors should be taking note of what is happening.
"China's going to survive all this. This is not the end of the next Middle Kingdom," he said in a live interview. "They have a real estate bubble on their hands and they're going to have to get through this.
"We're not saying China is going to completely melt down as a society or country. But they are going to have a real credit problem and they are going to have problems in the sector that is the largest part of their economy, and that is going to be a pretty big speedbump."
In a move last week that gave a major boost to global stocks, China announced it was cutting the reserve requirement for its banks. It was a stimulative measure to ensure that the flow of capital continues.
But Chanos said the more important story is trouble within the construction industry: Most notably, he said a developer recently missed a 2 billion yuan ($314.26 million) payment to another developer.
That's symptomatic of a real estate industry that saw a 40 percent drop in condominium sales for September.
"And that is continuing into December — so similar to Miami in '06 and Vegas in '07," Chanos said. "We started to see the market just stopped, and our next best guess is that prices now will begin to adjust downward."
Chinese consumers aren't likely to come to the rescue, he added.
"This is a homegrown problem, I think, for China — how to navigate through this giant bubble and transform the economy to a consumption-led economy. Consumption keeps dropping," he said. "The Chinese consumer is falling further and further behind."