China is hitting a wall both financial and ecological. And a leading indicator is water. And walnuts.

Here in Yunnan, the scenic countryside stretches to the horizon with beautiful farms and vast walnut groves, benefiting from the province’s gentle climate.

Yunnan is actually one of the biggest walnut producing regions in China, which itself is the largest walnut producer in the world.

But this won’t last. It can’t. They simply don’t have enough water.

That’s actually the reason I’m here– walnuts.

One of the two major focuses of our Chilean agriculture business is walnuts– something we chose precisely because of the long-term water crisis in China (not to mention the water crisis in California, another major walnut producer).

As Chinese production declines, the resulting shortage should boost prices and substantially benefit our firm.

For now, China’s government is doing everything they can to stem their food security and water crises from getting worse. And that includes commandeering the Mekong.

Over the last few years, the Chinese government has built several massive dams along the Mekong River in Yunnan province.

The Nuozhadu and Xiaowan dams are so large, in fact, that their combined reservoirs have enough capacity to cover the entire state of Maryland in five feet of water.

In addition to providing bountiful hydroelectricity for Chinese industry, these dams are also being used to hoard water.

You can read more about the financial side of the crisis at the link. China’s strength is an illusion. Quite a few people think that the China bubble is bigger than the American real estate bubble was in 2008.