Unprecedented growth in the world’s second largest economy doesn’t spell moneymaking markets, said hedge fund manager.

China is rarely ignored among emerging market managers. Those bullish on its unprecedented growth story have been met with resistance by market skeptics—concerned about China’s potential housing bubble, lack of rule of law, and worsening infrastructure standards.

“The fixed asset investment boom in China is a boom of real estate,” said Jim Chanos, president and founder of Kynikos Associates. “It’s a boom of high rises. This is Miami, this is Dubai, this is Las Vegas…this is a problem.”

The well-known hedge fund manager has built a reputation on being a perpetual bear; well-known for his short selling.

In the case of China, Chanos’ largest concern stems from the 50 to 70 percent rate of the country’s GDP that fixed asset investing currently represents. A pitfall in real estate investing, or a housing bubble burst may lead the country into a widely speculated soft landing.

“If there’s a drop off in fixed asset investing, there will be a soft landing and the numbers turn negative, quickly,” Chanos warned. “The credit issues are just beginning in China.”

Despite economic foreboding, Chanos was keen to point out differences between China’s growth story and others’ more organic, journey to hegemon status.

In looking at China’s infrastructure initiatives, such as its national high-speed railway, “standards are being cut,” Chanos said. “Regardless, the point is that infrastructure is only seven to eight percent of GDP.”

Building infrastructure undoubtedly playing a role in the economic development of the U.S., as well as a culture of entrepreneurship, small businesses and capitalism.

Chanos commented on difficulties China will have pursuing the same route.

“There is a culture of entrepreneurship, but I would be careful to incorporate in China because of the lack of good intellectual property laws—there’s just not enough protection,” he said.

Diverging cultures, too, may bar Western investors away from China.

“Their culture is full of hard work, and values education, the culture is Chinese,” commented Chanos. “Western investors have historically, not fared well in that culture—people in the private equity world know, standards are not the same as they are here.”

For those mistrustful of China, careful strategies can still deployed which would benefit from China’s growth, but use the safety net of countries that adhere to rule of law.

Burton Malkiel, a long-time academic and now chief investment officer of China- oriented Baochaun Capital Management, advocated for a “China-linked” strategy.

“There are Australian, and European companies that are benefiting from China’s growth, but their home base is not there, so there’s more transparency,” he said.