A woman counting a pile of coins.
Baona | E+ | Getty Images
While post-pandemic revenge spending continues, in some parts of the world the exact opposite is happening: revenge saving.
Instead of spending on impulse purchases, young people in the world’s second-largest economy are saving like crazy.
Young people are probably feeling the same thing as everyone else: the economy isn’t doing so well.
Christopher Beder
Gavekal Dragonomics
So why are young Chinese becoming increasingly cautious about spending?
“Younger people are probably feeling the same thing as everyone else: the economy is not doing as well,” said Christopher Beder, associate director of China research at Gavekal Dragonomics.
According to a recent report from the People’s Bank of China, total RMB deposits by households in the first quarter of 2024 increased 11.8% year-on-year.
China’s first-quarter GDP grew 5.3% year-on-year, beating expectations, but is still expected to slow, with the International Monetary Fund predicting growth of 4.5% in 2025.
Compounding the difficulties is a tight labor market that is particularly severe for young people, experts told CNBC.
“It’s a real phenomenon here that people are not spending money,” said Jia Miao, an assistant professor at New York University Shanghai. “Some young people simply can’t find work or find it harder to earn more. They have no choice but to spend less,” she added.
The unemployment rate for young people aged 16 to 24 was 14.2% in May, well above the national average of 5%. There are no official statistics on undergraduate monthly salaries, but a domestic report compiled by MyCOS Research and published in local media said a survey showed the average monthly salary for those with bachelor’s degrees in 2023 will be 6,050 yuan ($832), up 1 percent from the previous year.
“Confidence and animal spirits have disappeared among the youth. It will take years for the market to boom. [they] It feels good to spend money on revenge,” Rhyne said.
