China’s Economic Cracks Are Widening—and Exports Are the Only Thing Holding It Together

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The latest economic data out of China is flashing warning signs everywhere. Retail sales are barely growing, industrial production is slowing, fixed asset investment is falling, and property investment has collapsed nearly 16%. Home prices are sliding, millions have their wealth tied up in unfinished or overbuilt real estate, and confidence in the future is evaporating.
China is running a massive trade surplus—nearly $1 trillion so far this year—but that export dominance is masking much deeper problems at home. Consumer spending remains weak, unemployment among young people is high, the population is aging, and there’s no real social safety net to fall back on. Without exports flooding global markets, the situation would look far worse.
In this episode, Chris discusses why command-and-control economics never work, how Xi Jinping reversed years of liberalization, and why governments—whether in Beijing or Washington—fail when they try to pick winners and losers. From China’s real estate bust to the dot-com era lessons of pets.com versus Amazon, the message is the same: when government micromanages the economy, bad outcomes follow. The free market, not central planners, is what drives real growth.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Wow, the latest batch of economic numbers out out of
China are not good. Not good. Now, if it wasn't
it wasn't for them, actually, you know, flooding the globe
with exports, they'd be in even deeper trouble. You got
to take a look at this. Retail sales, you know,

(00:36):
up a little bit one point three percent, but still
heading in the wrong direction from where they were in October.
Industrial productions up four point eight percent, but still down
from the month prior. Fixed asset investment down two point
six percent, property investment down almost sixteen Home price is

(01:02):
really falling off a cliff, and that's one of the
big problems that they had there. They basically told everybody
go out and buy as much real estate and housing
as possible, and people have their net worth tied up
in real estate. Many of these buildings not built, waiting
and waiting and waiting for stuff to be built out
To mention the fact that's you know, they overbuilt. Let's

(01:24):
just leave it at that unemployment rate five point one percent.
Now try to report it a one trillion dollar trade
surplus for the first eleven months of the year. Again,
export dominance. This is despite the fact that we tariffed
the hell out of them. They need to kick in

(01:49):
consumer spending. They need their citizens to start buying. They're not.
They're not for again a myriad of reasons. People are
not exactly enthused about the future there. Again, a lot
of this has to be tied up with the real

(02:10):
estate issue they have. They don't really have any sort
of social security system. They too are have an aging population,
very high youth unemployment rate within that country. And the
issue with China in many respects, it's the same some

(02:30):
of the same issues that we have here in this country.
Command and control economies never work. They never work. Xi
Jinping true believer, true believer, took the country in the
opposite direction predecessor U Jintao, who continued to liberalize the

(02:56):
economy there and open things up. He very much so
as a command and control guy, thinking that the wizards
of smart in Beijing can micromanage an economy. A complete
exercise and futility. Whether it's in China, whether it was
in the Soviet Union, or whether it's here in the

(03:18):
United States. When we decide to pick and choose winners
and losers, government gets out of the way. Free market works,
people conduct business. It's a beautiful thing. Get the government involved.
We think that this area is going to be big,
we're going to subsidize this, or we're going to push this.

(03:38):
What do you know you don't. Yeah, I'm going to
try to explain this in a different way. I'm going
to go back to dot COM's. Okay, during the dot
Com runout, for some of your younger people out there,
there was a lit me of new online retailers. There

(04:06):
was CD now, CD now online music store again, CDs
we used to buy them. CD now is there. There
was pets dot com so pet food online. Uh, you
had one popped up after another. And then there was

(04:27):
this thing you might have heard of. It's called Amazon.
They sold books. That's it. Remember. The big concern was, well,
it's gonna crush Barnes and Noble's over. Well, CD now
is no longer, pets dot Com is no longer. Amazon

(04:48):
figured it out. Now nobody back at that point in time,
had any idea what Amazon would end up becoming. Stuff happens.
Bezos were smart, took advantage of various different opportunities a
forwardth and he took it and he won. He won.

(05:12):
These people within government when they're picking and choosing, they're
not letting the market decide. They're deciding. They're deciding. It's
not based upon what the wants, needs the people are.
It's what they think. If you get out of the way,

(05:32):
get out of the way, let the free market decide
things work their way out. You do like China's doing,
and you do like we're doing more and more and
more and metal metal in the free market. Well, guess what.
Not very good outcomes. Watch talk on Wall Street dot Com.