Young people in China are becoming more cautious about their spending habits due to economic uncertainty. Christopher Beddor, from Gavekal Dragonomics, believes that this is because they sense that the economy is not performing well. This is reflected in the 11.8% year-on-year growth in RMB deposits by households in the first quarter of 2024.
Even though China’s first-quarter GDP growth exceeded expectations, experts forecast a continued slowdown with a projected 4.5% growth in 2025 by the International Monetary Fund. The tight labor market in China is hitting young people especially hard, with an unemployment rate of 14.2% among youths aged 16 to 24 in May, significantly higher than the national average of 5%.
Jia Miao, an assistant professor at NYU Shanghai, pointed out that some young people are forced to spend less money due to difficulties in finding a job or increasing their income. This is highlighted by the fact that the average monthly salary earned by undergraduates in 2023 was only 6,050 yuan ($832), a mere 1% increase from the previous year. Additionally, confidence and consumer spending among the youth have decreased, and it may take years of economic growth before they feel comfortable to spend more freely.