Woman counting a pile of coins.
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Young people probably sense the same thing that everyone else does: the economy just isn’t doing that well.
Christopher Beddor
Gavekal Dragonomics
‘No choice’ but to spend less?
So why are Chinese youngsters getting increasingly circumspect with their spending?
“Young people probably sense the same thing that everyone else does: the economy just isn’t doing that well,” said Christopher Beddor, deputy director for China research at Gavekal Dragonomics.
Total RMB deposits by households in the first quarter of 2024 saw an 11.8% year-on-year growth, according to a recent report from the People’s Bank of China.
While China’s first-quarter GDP beat expectations to log a 5.3% year-on-year growth, forecasts still point to a continued slowdown, with the International Monetary Fund seeing a 4.5% growth in 2025.
Compounding the difficulty is a tight labor market that is especially bad for the young people, experts told CNBC.
“People refusing to spend money is a true phenomenon here,” said Jia Miao, an assistant professor at NYU Shanghai. “For some of the young people, it’s simply because they cannot find a job or they just found that it is more difficult to increase their income. They have no choice but to spend less money,” she added.
Unemployment rate among youths aged 16 to 24 came in at 14.2% in May, well above the national average of 5%. While there are no official statistics for monthly wages earned by undergraduates, a survey found that the average monthly salary of those with undergraduate degrees earned in 2023 was 6,050 yuan ($832), 1% higher from a year earlier, according to domestic reports compiled by MyCOS research and published on local media .
“Confidence and Animal Spirits have disappeared among the youth. It’ll take years if not longer of a boom market before [they] feel comfortable to revenge spend,” said Rein.