A growing pack of bears is now clawing away at China.

Much of the world might have bought into the miracle of China, but there's a significant platoon of heavyweight investment strategists and market pros who think this story of red hot growth in China is a fairy tale that ends in a nightmare.

Yes, our brothers in Beijing are enjoying an economy that continues to smoke, no doubt.

The latest numbers -- as rounded up for us this morning by Dr. Ed Yardeni of Yardeni Research -- speak to the fast-paced growth.

Total retail sales rose 16.2% year-over-year in October, up from 15.5% during September; sales of motor vehicles rose 43.6%; sales of household appliances, music, and video equipment increased 35.4%; clothing sales rose 22.7%; grain and oil sales rose 20.7%.

Still not convinced?

Here's some more data to choke on: Chinese industrial production increased 16.1% year-over-year in October, rising from a 13.9% gain in September; coal production rose 21.1%, while electricity generation capacity increased 17.1%; cement production increased 23.9%.

Investors have liked what they heard: The iShares FTSE/Xinhua China 25 Index Fund (FXI), an exchange-traded fund that tracks Chinese companies traded in Hong Kong, is up 81% in the last 12 months.

The response from the famous short-seller Jim Chanos?

Nonsense.

The legendary hedge fund investor, and founder of Kynikos Associates, is a dedicated China bear, Politico reports today. The money-making short seller is moving to short the entire nation’s economy.

The problem, so say a lot of China skeptics, is that the growth isn’t natural or organic but due to easy bank lending and massive government stimulus. (See also Why China’s Growth May Be a Mirage)

These scrooges note that the $4.3 trillion Chinese economy is underperforming despite a $900 billion stimulus program; Chinese officials are cooking their books (surging numbers in car sales but flat statistics for gasoline consumption?); and the country has excess capacity, producing huge quantities of goods and products that they'll be unable to sell.

Chanos’s skepticism is shared by a few other noted gurus, including longtime China bear James Grant, editor of Grant’s Interest Rate Observer.

In his most recent missive, Grant wrote to his readers that Beijing seems to surpass even Washington in substituting political muscle for the verdict of the marketplace.

So erring, Grant says, China produces clusters of avoidable errors: office buildings without workers, apartments without tenants, ports without ships, and expressways without cars.

“Early or late, we say, the economy of the People’s Republic will hit something bigger than a speed bump,” Grant writes. “It will suffer inflation or deflation or a hybrid disorder suitable to an economy that manages to combine the worst features of capitalism and socialism.”

Needless to say, Grant adds, as China goes, so go the fortunes of global resources producers such as BHP Billiton Limited (BHP), Rio Tinto (RTP), Vale (VALE), and others.

Even bulls on China are sounding more cautious, at least in the near term.

Portfolio managers at T. Rowe Price, in their latest letter to clients, said they remained relatively optimistic on Chinese equities. Though they remain overweight, the managers have pulled back a bit on their exposure as of late.

“The risks mainly involve China’s continuing reliance on exports and therefore its dependence on stressed US and Western European consumers,” said Scott Berg, manager of the Global Large-Cap Stock Fund.