Woman counting a pile of coins.
Baona | E+ | Getty Images
Young people probably feel the same as everyone else: the economy is not doing so well.
Christopher Beddor
Gavekal Dragonomics
'No choice' but to spend less?
Why are Chinese youth becoming more cautious with their spending?
“Young people probably feel the same as everyone else: the economy is just not doing so well,” said Christopher Beddor, deputy director of China research at Gavekal Dragonomics.
Total RMB deposits by households in the first quarter of 2024 According to a recent report from the People's Bank of China, the economy grew 11.8% year-on-year.
Although China's GDP in the first quarter exceeded expectations, posting a year-on-year growth of 5.3%, forecasts still point to a continued slowdown, with the International Monetary Fund expecting growth of 4.5% in 2025.
Experts told CNBC the problems are compounded by a tight labor market that is especially bad for young people.
“People refusing to spend money is a real phenomenon here,” said Jia Miao, an assistant professor at NYU Shanghai. “For some young people, it’s simply because they can’t find a job or they’ve found it harder to increase their income. They have no choice but to spend less money,” she added.
The unemployment rate among young people aged 16 to 24 was 14.2% in May, well above the national average of 5%. While there are no official statistics on the monthly salaries that students earn, one study found that the average monthly salary of those with a bachelor's degree earned in 2023 was 6,050 yuan ($832)1% higher than a year earlieraccording to domestic reports compiled by MyCOS Research and published in local media.
“Self-confidence and animal spirits have disappeared among the youth. It will be years, if not longer, before there is a thriving market [they] “I feel comfortable taking revenge,” Rein said.
