As the three-year epidemic containment, real estate crisis, and recent overcapacity have continued to deteriorate the Chinese economy, the youth unemployment rate remains high. Many young people have lost confidence in the future, leading to a trend of downgrading consumption and a growing enthusiasm for saving money.
The National Bureau of Statistics of the Chinese Communist Party (CCP) released data on Monday, December 20, 2024, indicating that the unemployment rate for labor force aged 16-24, excluding students, was 15.7% in December 2024. This continues the trend of high youth unemployment throughout 2024, with the highest rate of 18.8% in August and the lowest of 13.2% in June.
It is worth noting that the CCP has significantly narrowed the scope of unemployment coverage. People working for one hour or more are not considered unemployed. In addition, university students, rural farmers, and those who have been unemployed for an extended period without actively seeking jobs are not included in the unemployment statistics.
According to a report by Zhaopin Recruitment, the employment rate of college graduates in 2024 was only 55.5%. This means that nearly half of college graduates are unemployed.
Miss Liu, a post-90s citizen, told Dongguan Daily, “I save 2000 to 3000 yuan every month because having savings gives me peace of mind and prepares me for unexpected needs.” She used to be a big spender but developed a habit of saving and managing money each month after experiencing a period of financial uncertainty.
Ho-fung Hung, a political economist at Johns Hopkins University, stated that the CCP virus (COVID-19), economic stagnation, and crackdowns on the high-tech sector and private economy by the CCP government have compelled the younger generation to prepare for the worst. He commented, “This loss of optimism is unprecedented since China’s reform and opening up in 1978.”
Mr. Zhang, an post-80s citizen, recently told Dongguan Daily that saving money is a habit for him. He believes having savings provides security for a family’s needs such as monthly mortgage payments, car loans, children’s education expenses, and elderly care.
Reports from Dahe Daily and Tech Online indicate that the enthusiasm of Chinese youth for indulgent spending is waning, with saving money becoming a new hot topic among young people.
Posts on the social platform Xiaohongshu about saving money have exceeded 1.5 million, with a total view count of up to 130 million. On another platform, Weibo, the topic “Post-2000s generation saving money fanatically for partial retirement” has garnered approximately 80 million reads.
“Partial retirement” refers to young people accumulating a certain level of wealth through minimalist living, savings, and financial planning to enter a semi-retired state earlier on.
Ava Su, 26, joined Alibaba six months ago. She reduced impulsive spending significantly due to the perceived instability of the Internet industry, opting for a long-term savings plan to accumulate 2 million yuan (approximately $273,500), equivalent to 100 times her monthly salary.
Su stated, “I feel the economic situation is quite bad, and it seems challenging for everyone to earn money. Therefore, I believe safeguarding my finances is crucial.”
Lily Li, also 26, started working as a high school English teacher in Shenzhen in September last year. Despite earning a monthly salary exceeding 10,000 yuan, she drastically cut non-essential expenses such as clothing and concert tickets, allocating 80% of her income to savings.
Data from the online cash management tool “Yuebao” shows that as of the end of 2024, users born after 2000 averaged 20 deposits per month, twice the figure from May 2024. The average account balance per person in May was nearly 3,000 yuan, a 50% year-over-year increase.
The “2022 Youth Saving Report” released by the Post-90s Research Institute shows that the post-90s, the main workforce, have the highest proportion of monthly savers at 41.7%, followed closely by the post-95s at 40.6%.
The reason why young people are saving money is to fulfill basic needs and mitigate potential risks such as housing, medical emergencies, unemployment, and retirement, which largely rely on self-sufficiency among the Chinese population.
Data from the CCP’s central bank shows that by the end of 2024, the balance of resident deposits reached 151 trillion yuan, a year-on-year increase of 14.3 trillion yuan. New resident deposits accounted for nearly 80% of all new deposits, setting a historical high. Meanwhile, new resident loans in 2024 only increased by 2.7 trillion yuan, representing 15% of all new loans, both marking new lows since 2013.
Some economists caution that while CCP policymakers are relying on domestic consumption to support the Chinese economy, entrenched savings habits may deplete demand, weakening China’s long-term economic potential.
Gary Ng, a senior economist at the French Trade Bank in Hong Kong, stated, “As businesses compete for weaker demand, the ‘internal competition’ trend may intensify price competition and deflation. Consumer downgrading might erode middle-range products and services, leading to a weakening of China’s long-term growth potential.”