Investors continue to sell their stock holdings amid the lingering concerns regarding China’s economic slowdown. The surprise decision of the People’s Bank of China to devalue the yuan currency spooked investors, which prompted an equity selloff.

Jim Chanos, a prominent short-seller, founder and president of Kynikos Associates said China’s economic slowdown is “worse than you think” during an interview with CNBC’s Fast Money: Half Time Report on Friday.

Chanos made the statement as the stock markets in the United States extended losses for the fourth consecutive day this week. The S&P 500, Dow Jones Industrial Average, and NASDAQ are moving down to its worst week since 2011.

When asked about his perception of the current market trend, Chanos expressed uncertainty. He said, “I have no idea where we are.” He can’t tell whether the decline is a correction or we are entering a bear market. He noted that investors became “a little complacent” since the U.S. stock markets moved upwards for several years.

Investors realize that China is not omnipotent and omniscient

When asked about the economic slowdown in China, Chanos replied, “It’s worse than you think. Whatever you might thin, it’s worse. The biggest lesson over the last three months for me anyway is people are beginning to realize that the Chinese government is not omnipotent and omniscient.”

“The way they handled both the runup of their stock market, the panic responses, the devaluation, non-devaluation,  and the mixed signals from different ministries given investors pause,” added Chanos. He added many investors “don’t have a clue.”

Chanos said should forget the performance of the Shanghai Composite. He said they should focus on China’s declining GDP growth, and Chinese consumers could affect American companies with exposure in the country.

Chinese President Xi Jinping is anti-Western

Furthermore, Chanos noted that investors were surprised by the changes in the political situation in China over the past few years. According to him, Chinese President Xi Jinping is a “much different person” than they thought. He described the Chinese President as a “strong leader, nationalist, anti-Western.”

Chanos said China was open for business under the previous regime, but the case is not the same under Xi Jinping’s regime.

Other analysts’ comments about China

Despite the efforts of China to support its stock markets, the Shanghai Composite Index decline to its lowest level since March. The index was down 4.3% earlier today.

Deutsche Bank AG  analyst Jim Reid told the Wall Street Journal, “The Chinese have created an air of fragility around the globe. Markets will now surely have to firm up considerably for the Fed to pull the trigger next month.”

On the other hand, Kiran Ganesh, a multi asset strategist at UBS AG Wealth Management commented, “Now we’ve had some harder evidence that China is slowing relatively fast, people have chosen to get out.”