Okay folks, I don't think a lot of you understand what is going on right now in China. Just for starters, China's own economic data shows that unemployment is well well above where it was the last decade plus before Kovid, it seems endlessly stuck at these extremely high levels. Their real Gdp is in free fall. Many analysts are expecting it to continue plummeting.

Chinese consumer confidence is lower than at any point in the last 30 years, and even on a longer term trend, their debt to Gdp was already projected to climb to over 90 percent in the upcoming years. On top of that, Fortune reports that housing is a ticking time bomb with China's real estate bus deepening as housing prices fall for the 11th straight month across 70 Chinese cities. And these are just a few problems going on in the second largest economy in the world. And regardless of where you live, the crisis in China right now is going to have a massive impact on you.

And in this video, I am going to walk you through the primary reasons that China's economy is falling off a cliff. I will put the time stamps down below and we will get right to work. After a quick plug, our 50 off Recession 50 coupon code on ziptraderu expires midnight on Monday, which is the end of Labor Day. If you would like to learn more about our very violent step-by-step lessons, private chat, daily morning briefings, and full price target list, I will put a link down below.

Make sure to check it out before the weekend ends so that you can get that deal. This will be our last sale on the program until Black Friday and we've had it on for quite a while, which I think is a fair amount of time. Okay, so the first factor that I want to discuss are lockdowns. Lockdowns are one of the driving factors of China's accelerating collapse, and in fact, Bloomberg just reported that China is going to move to lock down mega city Chengdu as part of their Covet Zero policy.

This is the latest of dozens and dozens of major lockdowns that have taken place in China this year alone, and I think it's really difficult for Americans to judge how impactful and how devastating these lockdowns are. I don't know about you, but I am not familiar with anything in regards to Chengdu. I don't even know if that's how you really pronounce it. I honestly don't even recall knowing that this place existed before today.

It must have come up somewhere, but I really don't remember the city. So to me, when the media is reporting, oh, we just locked down Chengdu. I'm like, what, where? What's that? Is that? A food that doesn't sound very tasty. People shouldn't be eating any Chengdu.

And you look it up and it's a city deep east into China, far away from Beijing, Shanghai, and Wuhan, the typical major cities you think of when you think of China. But Chengdu is not a small city. It has a population of 21 million people If you take American city populations, that's like if you combined the populations of New York City, La, Chicago, Houston, Phoenix, and Philadelphia all together. Clearly, Chengdu is a massive, massive city with a massive, massive populace.

And if you look deep into it, tons of manufacturers, from tech to auto to generalized construction are based in that city. Foxconn, which is the biggest assembler of Apple's Iphone, and they assemble a lot of other Apple products, has a huge branch there as well. The city is also known for their Giant Panda Sanctuary, which means if you're bullish on Pandas, these lockdowns are even more devastating, right? And I am always bullish on Panda. So I'm really a bag holder here.

So Chengdu, this massive, massive, influential city, is going back into lockdown. And while the government is currently saying it's going to be short, other cities with short lockdowns ended up stretching out months and these restrictions have huge tolls. Imagine all the economic loss involved with forcing millions of residents to lock themselves away from society. You don't have to think too hard to imagine what that's like for the economy.

Most of us lived lighter versions of that for smaller amounts of time. But in China, those lockdowns just keep coming back over and over and over again. And the worst part is that businesses, when they're making decisions, they have to factor in hey, we don't know if we're even going to be able to operate all year. We don't know if we're going to make it all season.

We don't know. Nobody knows when the next person's going to sneeze or cough and the whole thing's going to get shut down. and then citizens are allegedly having to line up for mandatory covet testing that kills tons of time as well. All of this is simply a huge, huge inefficiency and waste of workers time that could otherwise be spent actually operating the economy.

Which, by the way, China before this, was one of the fastest growing economies. Consistently, decade after decade, and you think about how devastating it is for a country whose population is 1.4 billion and accounts for almost 20 percent of global population to be shutting down and barricading off various cities at random spontaneous points throughout the year. And it explains why. Not only is this extremely dangerous for China, but also for the global economy and everybody, including you and me.

Secondly, building on this point, major economic generators are being forced to shut down regularly. China's economy is falling off a cliff because their economy is built largely on manufacturing and exports, but they keep closing their manufacturing hub much of the time due to zero covid, but also due to some other reasons on this list that we're going to get into. But look at this data hither: China's manufacturing Pmi is registering a massive downtrend in activity, a downtrend that hasn't been registered since some of the bigger lockdowns earlier this year. In places like Shanghai, Shenzhen, and Beijing, many project this heading in the same direction Straight down.

Third, and this is something that I don't see a lot of people talking about, but China's having a lot of environmental problems. According to the South China Morning Post, extremely large chunks of China are either abnormally dry or in a moderate to extreme drought. And this is a huge, stinking problem because when you get to drought levels, what happens? Well, that's not just a massive water shortage, but that's also something that leads to huge crop damage and or complete loss. This is coming at a time where we already have huge shortages on a global scale in most crucial food commodities.

Since July, provinces and cities in Southern China, including in Huay, Jiang, Shi, Hubai, Hunan, were affected by drought. I probably butchered each of those cities, but I tried my best. Low water levels in the Yangtze River, increased pressure on hydroelectric power plants, affecting water supply and electricity production for millions of people, and many companies, forcing the temporary closure of factories in some provinces. So here we have yet another reason that factories are being shut down.

So it's not just coveted, but it's also, hey, the economy. We don't even have power to run the economy in a lot of areas. On top of that, China is having their worst heat wave on record for weeks now. A power crunch caused by a record heat wave and accompanying drought has raked wrecked havoc across Sichuan, a province home to 80 million people in southwestern China.

Its dim skyscrapers, shut factories, darkened subways, and plunged homes and offices into rolling blackouts, forcing air conditioning to be unplugged and killed thousands of poultry and fish at farms hit by electricity cuts. The impact has been felt far and wide, from the neighboring mega city of Chuang Queen and the Eastern provinces along the Yangtze River, to the financial hub of Shanghai, where the iconic skyline went dark this week. To save energy, you literally have China going and rationing. Who gets power? I would hate to live in an area where you have extreme heat, droughts, power shortages, and overreaching government that I could not stand fourth.

And quite frankly, this may be the biggest and hardest issue for China to get out of. but they have a massive housing bubble. You had the Chinese government pushing policies for decades that encouraged reckless and unneeded building of massive cities that turned into ghost towns, and that helped create tons of jobs, tons of economic activity, and made China look great on a global scale. But it turns out, unfortunately when push came to shove, a lot of that was just a House of Cards.

Kind of like China's own 2008 crisis. Harvard Professor Kenneth estimates that a drop of 20 in real estate related investments could cut five to ten percent out of China's Gdp, and that the subsequent drops in real estate and construction employment could create significant instability in China's job market. Again, the job market right now in China is not great. It's pretty damn bad, and this would be on top of all the other issues that China is facing and the Central Bank is attempting to cut rates, But that might be too little too late.

statistical estimates estimate. The statistica from America's National Borough of Economic Research indicate that real estate, including allied activities, contributes as much as 29 29 to China's Gdp, and has been a key driver of its sustained economic growth. Besides, around 70 percent of household wealth in China is stored in property. What does that mean here? Well, it means that if the Chinese real estate market collapses, you're threatening more than a quarter of China's Gdp and 70 of household wealth.

That is a disaster. Talk about destabilization. And that is not even mentioning the debt problem. here.

People in China like to buy homes on something called pre-sale which means essentially buyers go out to take a loan to buy a property before it's even built, and then developers who get the money go and take out their own loan to actually build the property. In a lot of cases, you're kind of double leveraged on both sides of the stick. You got the households leveraged, you got the developers leveraged, and you have property that hasn't even been built yet. In fact, the Hindu.com reports that 70 to 80 percent of new housing sales in China happen via these pre-sale methods.

And all of a sudden, a lot of Chinese folks that bought these pre-sale houses on loans are going. and they're refusing to pay mortgage payments because they're like, hey, our buildings aren't being built or if they are, they're being built very, very very very slowly when they're not even useful to us anymore. So they're going out and they're going on mortgage strikes and not paying back loans. And then developers don't have money to finish the projects and they can't make their payments because the projects haven't been finished themselves.

I mean, it's really just a cluster f Let me read you some stats. Property sales in China have fallen for 11 consecutive months. Combined contract sales fell by 39 year-over-year in April, property sale value dropped by 46 year-over-year which is the sharpest fall since 2007.. So it's like, hey, one of their Pillar Industries real estate is crumbling fast.

Over 60 percent of China's developers are estimated to have hit at least one of the three debt thresholds that the government set as a red line. So such. It's not even a question of, well, are we heading towards a housing crisis in China? It's like, no, they are already in one and it's already starting to have a huge impact. But you're likely just at the beginning.

And when residents and developers and in some cases, investors who took out loans on Morgan to invest went and borrowed tons and tons of money to fund these projects. and all these projects are falling through. What happens? What happens when none of them can pay? Well, The banks have to go and absolve all those losses. So you have these massive, massive banks that are sitting on massive, massive losses.

At least lost potential. It's only a matter of time before something clicks and all of a sudden everything starts collapsing, right. And we'll say that China is very, very centralized. so the banks are kind of just an offshoot of the Ccp and the government as an apparatus.

But regardless, this is likely to have a massive impact on a global scale, especially again when the globe is so frail right now. So I mean essentially China is a story of rolling lockdowns, widespread droughts, and heat waves. You have factories being closed. On a rolling scale, you have debt crisis after debt crisis.

You have a housing bubble that was very, very lucrative and drove up housing prices for much of the last two decades and housing development and overall city development. But now all of that is turning on its head and it's threatening to bring China back down. And then you look at the map of China's economy. I stole this one from the visual capitalist.

They have pretty nice infographics, but whether you are talking industrial production, wholesale and retail trade, farming, real estate, construction, transport, renting and leasing, accommodations and resorts finance Almost everything that you're talking here except for maybe a few different sectors. All of these are going to be destroyed by the massive macro headwinds that China is facing right now. Quite frankly, when the massive China Domino falls, it could easily knock over the other dominoes in North America, Europe, and the rest of the world, right. especially considering all of those are on shaky grounds themselves.

Almost every major area on earth is having huge economic issues right now. They're all kind of tied together on a string. A string that could break real easy. Anyways, folks that caps off the video, let me know what you think down below: Are you bullish or bearish on China's economy? Do you think this will have an impact on the United States? If so, how much make sure to hit that ravishing like button and subscribe.

If you like video content like this, I will put a link to Zip, trader you below if you want to get 50 off before the coupon code expires on Labor Day, and if you want to get up to 13 free stocks with Moomoo, I will also put a link to them down below. Have a good one folks and I will see you in the next video.