After the end of the pandemic, a trend of “revenge saving” has emerged in various countries around the world, which is still lingering to this day. However, a contrasting phenomenon is unfolding in China, where young people are now embracing the concept of “revenge saving” by setting high savings goals each month.
Despite the pandemic coming to an end, China’s economy has been struggling to recover from the gloom, with the real estate market plummeting, youth unemployment soaring, and consumer confidence remaining low. In this scenario, Chinese young people have opted not to indulge in impulsive spending like their counterparts in other countries but rather are obsessively focusing on saving.
Over the past two years, many hashtags related to savings have been created on Chinese social media platforms, such as “Saving Battle,” “Savings Check-In,” and “Accumulating Gold Beans.” CNBC pointed out that “revenge saving” has become a trend among young Chinese people.
On Chinese social media, a 26-year-old girl with the username “Little Home” detailed how she manages to limit her monthly living expenses to 300 Chinese yuan (approximately $41.28), with many of her shared videos demonstrating how she keeps her daily food costs below 10 Chinese yuan (around $1.38).
Some individuals are even looking for “saving buddies” on social media. These “buddies” refer to partners with shared interests in a particular field, coming together to pursue a common activity, reflecting a new social culture that has emerged in China in recent years.
These users have formed a savings circle online to ensure that members stick to their goals. Saving measures also include dining at community canteens, often set up for the elderly and offering relatively inexpensive prices.
Shaun Rein, Managing Director of China Market Research Group, told CNBC, “Chinese young people have a mentality of revenge saving.”
He believes that the confidence of Chinese young people has vanished, and it will take several years or even longer for them to confidently engage in revenge spending after the recent economic challenges.
Rein said, “In the 2010s, young people in China often spent more than they earned, buying luxury items like Gucci bags and iPhones on credit. It’s different now; Chinese young people are beginning to save more.”
“Reverse consumption” and “thrifty economy” are also signals of young Chinese people tightening their purse strings. The former refers to consciously reducing expenses, while the latter involves actively seeking discounts and offers while shopping.
A trend called “Special Forces Travel” has emerged among young Chinese people, focusing on traveling in a way that challenges limits, trying to visit as many destinations as possible in the shortest time and with the least amount of money.
So, why are young Chinese people becoming increasingly cautious about their spending habits?
Christopher Beddor, Deputy Director of China Research at Gavekal Dragonomics, told CNBC, “Young people may feel the same as others: the economic situation is not so good.”
According to a recent report by the People’s Bank of China, household renminbi deposits in the first quarter of 2024 increased by 11.8% year-on-year.
Meanwhile, the tightening labor market has exacerbated the challenges young people are facing.
Jia Miao, Assistant Professor at Shanghai New York University, also stated, “People’s reluctance to spend money is a real phenomenon.”
She added, “For some young people, it’s because they can’t find jobs, or they find it increasingly difficult to increase their income. Therefore, they have no choice but to reduce their consumption.”
Since the pandemic, the job placement rate for recent graduates in mainland China has been on the decline. According to the “2024 University Employment Strength Survey Report” released last month by Zhaopin Recruitment, only 48% of recent graduates received informal job offers, a 2.4 percentage point decrease from the same period last year.
At the same time, the proportions of recent graduates pursuing “slow employment” and “self-employment” have increased from 18.9% and 13.2% last year to 19.1% and 13.7% this year.
The authorities in China avoid using the term “unemployment” and often prefer terms like “slow employment,” “light employment,” “flexible employment,” and “self-employed economy” to confuse the situation.
According to surveys, 90% of graduates are not fixated on finding a “good job” but rather on finding any job. The proportion of signing contracts in third-tier cities and below has also increased, accounting for one-fourth of overall contracts.