The Chinese economy is facing challenges, and young people are feeling the impact. Despite an annual GDP growth of 5.3% in the first quarter of 2024, there are forecasts of a slowdown, with the International Monetary Fund predicting growth of 4.5% in 2025. One factor contributing to this economic downturn is the tight labor market, which is particularly challenging for China’s youth.
Young people aged 16 to 24 have an unemployment rate of 14.2%, which is significantly above the national average of 5%. Many young people find it difficult to secure better-paid jobs, leading to a struggle to raise their incomes. This has resulted in some having no choice but to spend less money, as they cannot afford more than their basic needs.
Experts believe that the loss of self-confidence and animal spirit among young people has led to a reluctance to engage in revenge spending. The average monthly salary earned by students in 2023 was only $832 yuan ($130), an increase of just 1% from the previous year. It will take years before the booming market can restore confidence and lead young people to feel comfortable enough to increase their spending again.
Total household deposits in RMB recorded a significant growth of 11.8% in the first quarter of 2024 according to data from the People’s Bank of China, indicating that even with a slowing economy, people are still saving money.
In conclusion, young people in China are cautious about spending due to poor economic performance and tight labor market conditions that make it challenging for them to secure better-paid jobs and raise their income levels, leading them not only save money but also lose confidence and animal spirit leading them not engaging much on revenge spending as predicted by experts