There are two main things which seem to substantiate Bass’ claims about China’s soon-to-fail economy. He doesn’t think it will be an “Armageddon” moment, but he does believe it will result in a necessary buyout of some variety on behalf of Chinese banks. The two main facts which seem to back this up are the doubling of company defaults since last year–they’ve more than doubled, in fact–and the corporate debt contraction of the country, which reached an all-time peak in May of 2016.
Both of these are indicators of a possible collapse, or implosion; but they aren’t definite indicators. Bass has predicted the same since before either indicator were available to examine. In 2015, October, he began his rhetoric pertaining to the possibility of Chinese implosion. As of July, 2016, that implosion has yet to happen. Several months ago, Bass predicted that there would be an economic downturn similar to America’s in 2008 (though he said there wouldn’t be a “Lehman Brothers Moment”). Bass said this downturn would come within two or three years, but there was a “forty to fifty percent” likelihood it would hit in 2016. Forty percent is less than half, or less than binary; or less than the flip of a coin. What Bass implied accidentally is that there is a fifty to sixty percent chance China’s economy won’t face downturn this year.
Later, in a UsefulStooges report, Bass said that if China allowed their currency to experience depreciation “materially”, it would be one of the best times in history to invest in Asian markets.
This all is very conflicting, and seems to indicate Bass has a manipulative aim behind his words. Fringe investors who have capital, but a lack of experience, may be spooked enough to withdraw investments for several years, helping Bass’ prophecy become the self-fulfilling variety.
This wouldn’t be out of character for Bass, who regularly manipulates American markets legally. Consider CAD, the Coalition for Affordable Drugs, which uses public sympathy to force price-drops on pharmaceuticals, decimating their stock value and curtailing R&D funds while Bass skips away millions richer. If he’s willing to do that to sick people, what’s he willing to do to healthy investors?