China's economic slowdown leaves millions of jobs at stake

China's slowing economy leaves millions of jo... 01:58

BEIJING -- On Wall Street, stocks closed lower -- the Dow lost 109 points -- in part because of the economic slowdown in China.

The communist government there is struggling to manage enormous debts, shaky stock markets and a growing perception that it may not be equal to the task.

At a roadside Beijing job-fair, those searching for work told CBS News it's getting tougher.

"Yes, I can feel the pressure," Niu Sisi told CBS News. "The economy is slowing and industries are facing lots of changes."

Niu Sisi. CBS News

Peking University finance professor Michael Pettis said China faces a debt crisis after borrowing tens of trillions of dollars for iffy investments, in areas like real estate and shipping.

"They've spent massive amounts of money building unnecessary things," he said. "Beijing has never gotten its arms around the problem of debt, until it does, things will continue to get worse."

Peking University finance professor Michael Pettis. CBS News

Now, China is trying to re-balance its economy -- leading to massive layoffs in government owned industries.

But, amid the backdrop of labor protests, state media has run a slew of glowing "good-news" stories.

President Xi Jinping visited top state media outlets in February -- urging the press to pledge loyalty to the Communist Party. It's an effort to control the story and project stability.

"The fear is that it's still possible for Beijing to mismanage the process and for it to be much more disruptive than expected," said Pettis.

China's government has tried to convince the world that its economy is not in peril, but it's still not clear if that's just wishful thinking.