International management consulting firm Oliver Wyman released a survey on the wealthy population in China, revealing that Chinese individuals are even more pessimistic about the economy than during the pandemic, with young affluent groups feeling the most “economic loss”.
According to a survey conducted by Oliver Wyman in May this year on China’s affluent class, 22% of respondents expressed pessimism towards the Chinese economy, slightly higher than the 21% in October 2022, when the COVID-19 pandemic was still ongoing before Beijing announced the relaxation of the “zero-COVID” policy.
The surveyed Chinese wealthy individuals, when discussing their outlook on the economic prospects in the next five years, were generally more pessimistic compared to 2022.
Imke Wouters, a partner at Oliver Wyman, stated that the current pessimism among Chinese wealthy individuals towards the economic outlook is not just a short-term sentiment but a “fundamental change in mindset”. If a person feels that their financial situation is not good, their behavior will change – they may spend less, save more, and be less willing to take risks in investments or consumption. This psychological shift can impact overall economic activities.
Wouters mentioned, “The longer this situation persists, the more pessimistic they will become about the long-term outlook, and consumption will become more cautious.”
The survey found that regardless of income level, an increasing number of respondents felt that their family’s economic situation had worsened since 2023.
China’s official consumer confidence index has remained low since dropping to 85 points in November 2022.
Meanwhile, Chinese people have become extremely frustrated due to perceived “inequality of opportunity”. Another survey indicated that the number of people who consider “inequality of opportunity” as the primary cause of poverty has been increasing annually, with this reason now ranking first from being sixth nearly 20 years ago.
The survey showed that young people (aged 18 to 28) belonging to the affluent class and living in first-tier cities in China were the most pessimistic about the economy among the four age groups, experiencing the largest drop in confidence.
Oliver Wyman stated that a majority of wealth in China is concentrated in the millennial generation (around 30 to 45 years old) and Generation X (around 45 to 60 years old), who are more optimistic mainly due to having accumulated more wealth, stable jobs, and expectations for “better times”.
Among the respondents, those aged 29 to 44 were the most optimistic about the economy, especially in terms of their outlook for the next five years.
Despite holding a pessimistic view on the economy, many affluent Chinese individuals are more enthusiastic about traveling abroad compared to before the pandemic.
Wouters mentioned that they prefer to spend money on things that “make them feel better in the moment” rather than on luxury goods.
Oliver Wyman predicts that the proportion of wealthy Chinese individuals traveling abroad this year will reach 37%, higher than the 32% in 2019 before the pandemic. Currently, 27% of respondents have traveled abroad, with an additional 10% expected to do so later this year.
However, the report noted that the travel destinations for China’s affluent class may not necessarily return to popular regions pre-pandemic, like the United States, but are more inclined towards choosing closer locations. Analysis from Oliver Wyman revealed that the number of Chinese tourists traveling to Malaysia and Japan has fully recovered to the levels of 2019.
This survey was conducted by Oliver Wyman in May this year, targeting high-income households in China with a monthly income exceeding 30,000 RMB (approximately 4,180 USD) from 2,000 households. These surveyed households represent only a small portion of Chinese consumers.
(Translated and adapted from CNBC’s report)