China’s COMING COLLAPSE!! Most Troubling Signs Yet!!

What on Earth is unfolding in China Every week seems like an economic Cliffhanger doesn't it from colossal Property companies scrambling for Bankruptcy safety nets to vast empty Construction jungles and staggering Youth jobless rates China's Financial Pulse is erratic and let's be clear this Isn't some isolated storm in a far-off Sea the world's economic ship is hitched To China's anchor so what's the next Wave bringing now last month we covered Some of the risks facing China this Video will attempt to explain in simple Terms what is happening right now in the World's second largest economy we'll Paint a picture of China's economy as it Currently stands before assessing the Implications its condition has for both The global economy and for crypto it's a Big old task so let's Dive Right In Everyone expected China's economy to Leap Forward like a sprinter out of the Blocks once those zero covered Restrictions were lifted late last year But it's been more of a limp than a leap In recent months a string of concerning Economic data has emerged and nowhere is This more drastic than in the housing Sector Starters evergrand a giant property Developer has again been in the news you Might remember that this Behemoth was All over the headlines after defaulting

On its debt in 2021 and earning a Reputation as the world's most indebted Developer with debts in excess of 300 Billion dollars well the companies Facing more bad news its debts have Climbed to 340 billion according to the Latest estimates and it recently filed For chapter 15 bankruptcy protection in The United States this is a provision For non-us companies in a nutshell it Means that companies undergoing Restructuring can't be sued by creditors But evergrand is far from being the only Mega developer in trouble more on this Point shortly though first it's Important to outline why a crisis in China's housing market is a bigger deal Than you might expect in most economies The housing sector accounts for a Significant chunk of the gross domestic Product or GDP a key metric for gauging A nation's Financial Health but in China Housing is particularly important making Up an astonishing 25 to 30 percent of Its GDP practically double the figure For the United States why is this well Most Chinese citizens with excess cash Have limited options over where to park It access to stock markets is Complicated and access to International Markets all but impossible instead People Park their Savings in housing Which has traditionally been seen as a Sure thing this partly explains the

Surreal spectacle of of ghost cities Massive clusters of vacant apartment Buildings dotting Urban Landscapes and These aren't just empty Flats they're Investment pieces that owners don't rent Out fearing it would depreciate their Value By some estimates we're talking a Mind-boggling 65 to 80 million vacant Apartments across China Footage of these desolate Urban Landscapes looks like something out of a Dystopian movie Now for many years house prices in China Seemed like they were on a steady growth Trajectory but this has changed in Recent years Officially new home prices have seen a 2.4 percent dip since August 2021 with Existing homes faring even worse Registering a six percent decline But anecdotal evidence suggests picture Is actually much worse according to one Report data from some property agents And private data providers showed drops Of at least 15 percent in Prime Neighborhoods of major metropolitan Areas like Shanghai and Shenzhen this is Not good for real estate companies Private investors or the economy as a Whole it ferments a climate of economic Uncertainty and drives down spending It's also not good for aspiring Homeowners who are concerned that they

Invested their life savings into Projects that won't be completed and you May recall how last summer disgruntled Investors refused to pay their mortgages In protests over delays in completing The homes they had bought such outbursts Are rare in China So what exactly has brought about this Drop in house prices well the reasons Are complex but let's unpack them as Succinctly as possible first consider China's staggering Urban migration Statistics From 1990 to 2020 the urban population Mushroomed from around 301 million to a Colossal 848 million that's not an influx it's an Avalanche Spurred by this Mass migration and Relatively cheap credit developers went Into overdrive constructing buildings as Fast as they could yet despite the Construction boom housing soon became Unaffordable for many particularly in Major cities as Bloomberg reported in 2020 buying an apartment in Shenzhen Could set you back a staggering 43 times The average annual salary in a global Context that's four times more punishing Than in notoriously expensive cities Like Los Angeles or San Francisco Absolutely astonishing Now to take some of the heat out of the Housing bubble the government stepped in

Around 2020 with a battery of regulatory Measures these ranged from heftier Mortgage down payments and curbs on Buying multiple properties to stricter Credit conditions for developers Although well-intentioned these steps in Retrospect appear to have been a little Too aggressive Developers hit the brakes and many Defaulted on their debts this in turn Spooked potential buyers and drove Demand and prices downwards Now assessing the full scope of this Crisis is complicated reliable data in China is hard to come by the government Wants to control the narrative Minimizing releasing data that could Send Panic through the markets and make The government look bad a stark example Of this took place in August when the Government stopped publishing youth Unemployment data after it reached Unprecedented levels of over 21 in June Of this year but some facts cannot be Fudged big companies are in trouble and Markets across the world are paying Attention While evergrand has been grabbing the Headlines it's by no means the lone wolf In China's deteriorating real estate Landscape Take Jeong grong International trust for Example traditionally a heavy hitter in Real estate Investments the company has

Recently defaulted on numerous Investment products concerning you Betcha but bigger story is that Country Garden a property developer four times Larger than evergrand with an estimated 1 million apartments under construction Missed Bond payments in early August Country Garden has until early September To make payments or risk default but Regardless of whether it's able to come Up with the money or not the damage has Been done the already shaky confidence In China's housing market has taken yet Another nosedive now I should emphasize That this hit is not nearly as bad as The evergrand story in 2021 why Well for one thing Country Gardens total Liabilities sitting at 190 billion Dollars don't hold a candle to evergrans Colossal 340 billion and there's the Grim fact that analysts have quite Frankly grown somewhat numb to the drip Feed of unsettling news from China's Property Market It's less of a sudden shock to the System and more an expected Aftershock Amid ongoing seismic activity So where does China go from here what Levers can the government pull to steer The economy out of Troubled Waters Well the most straightforward Prescription might be robust fiscal Stimulus think slashing interest rates Dramatically to Spur borrowing and

Perhaps energize exports a traditional Cornerstone of China's economy yet that Tactic is not without its pitfalls it Could potentially trigger a capital Flight as both corporations and Households seek more lucrative interest Rates abroad This would cause China's currency the Renminbi to sink further against the Dollar as of now the government steps Have been more tentative than Transformative case in point on the 21st Of August China's Central Bank modestly Trimmed its one-year loan prime rate From 3.55 to 3.45 the general consensus Among Market Watchers however is that This move is akin to bringing a pocket Knife to a sword fight more audacious Reforms are urgently needed On the upside China isn't exactly Unarmed in this struggle the state has a Formidable toolkit for crisis mitigation Among other options it could compel its Banks to lend and move that while no Magic bullet could act as a firewall Against a full-scale financial meltdown And an ensuing credit crunch Now I hope this all makes sense and that You have a better grasp of what's going On as I mentioned it's a complex topic And this is an oversimplification but it Should provide you with a good overview So with the Chinese landscape charted Let's pivot to the Ripple effects on the

Global stage and the cryptoverse well For starters here's the Silver Lining Chinese real estate developers carry Limited amounts of foreign debt so this Dampens fears of a global meltdown akin To the Layman Brothers Fiasco of 2008 in The US yet trepidation around China's Economic health has reverberated through International stock markets as Cointelegraph reported the msci world Index and aggregate of sizable stocks From 23 developed Nations dropped Sharply on the 17th of August amid these Concerns this is directly relevant to The crypto Market since as we've learned In recent years cryptocurrencies aren't Immune to macro economic forces quite The opposite in fact far from serving as A financial Lifeboat in choppy Seas Bitcoin finds itself labeled as a high Risk asset During volatile periods investors tend To reduce their exposure to such assets Case in point the weak commencing 14th Of August saw bitcoin's value Fall by 12 Percent most altcoins naturally fared Much worse and it's crucial to emphasize That China's economic turbulence is Merely one ingredient in this complex Stew affecting crypto prices Multiple factors intermingle in this High-stakes game evaluation for instance Ongoing anxieties about the U.S federal Reserve potentially ratcheting up

Interest rates have also contributed This raises the cost of credit and could Divert investors towards more Traditional and perceived safer Financial harbors and yet eclipsing These variables was the news that Elon Musk's rocket company SpaceX had Divested part or all of its Bitcoin Holdings when the world's wealthiest Individual and crypto proponent takes Action markets take note now before we Wrap up let's hone in on three China-centric elements that could sway The cryptocurrency market each deserving A spot on your radar First is whether China's Central Bank Will weaken the yuan in an effort to Boost its economy The People's Bank of China has not explicitly signaled a Weakening of the Yuan but it's a Possibility the government might explore To inject Vigor into the flagging Economy a devalued Yuan could dampen Crypto fortunes at least in the short Term case in point China's yuan Devaluation in August 2015 led to a 23 Plunge in Bitcoin prices and a 27 Contraction in the broader crypto Market Over a fortnight different times back Then of course but worth noting Nonetheless The second factor to look out for is Whether the government implements a big Stimulus package if China does give

Stimulus to Green Light the resultant Liquidity could buy riskier asset Classes like cryptocurrencies to take One example during the pandemic the US Government issued a series of stimulus Checks to its citizens twelve hundred And fourteen hundred dollars right to Their bank accounts surveys suggest that Approximately 10 percent or nearly 40 Billion dollars of this windfall found Its way into stocks and crypto Now while China isn't the US and the Nature of any stimulus would differ the Point remains more money sloshing around Usually bodes well for crypto Now I would be remiss not to mention Hong Kong here unlike mainland China Where crypto trading is banned Hong Kong Is moving to establish itself as a Crypto Hub in a significant move this August regulatory changes allowed the Issuance of the Region's first ever License for smaller cryptocurrency Exchanges drawing a favorable initial Response from the industry exchanges Like hash key and OSL have already Secured their licenses and other crypto Companies like wobi okx and ambergroup Are making inquiries with additional Traction in the web 3 domain Hong Kong Is positioning itself as a focal point For crypto and blockchain activity it is Definitely a space worth keeping your Eye on

So that's just about it for today folks What happens in China will affect us all In some way or another and you'll likely Notice these effects soon enough now if You found that content valuable hit that Like button to show your appreciation to Stay updated with our latest videos Don't forget to subscribe and hit the Notification Bell feel free to share This video to spread the knowledge and If you're well versed in crypto and are Looking for a Secure Storage solution or An economical trading platform check out The coin Bureau deals page you'll find Substantial discounts on top-notch Hardware wallets as well as up to forty Thousand dollars in bonuses and airdrops From reputable crypto exchanges the link Is in the description below thank you For tuning in and I'll catch you in the Next video this is Guy Signing off [Music]