Following society and social media, young people in China between the ages of 16 and 24 save their money and forgo small luxuries such as manicures, high-quality make-up and eating out.
Nicknamed “Koukouzu” or “the young thrifty Chinese” according to a recent Global Times reportthis expanding group follows a frugal lifestyle and compares price to quality, with a tendency towards used goods that they can also resell.
“We’ve been tracking consumer behavior here for 16 years, and in all that time I’ve seen the biggest concerns among young consumers,” he said Benjamin Cavender, Managing Director of Market Research Group ChinaReuters reported on Sunday (September 18).
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China’s economy has been hit by the country’s tough COVID policy, which has included continued lockdowns, mass testing and no active cases. The government’s crackdown on big tech firms also impacted younger workers, according to the Reuters report.
Unemployment among 16-24 year olds in China is nearing 19 percent, with workers in some sectors taking wage cuts. The average salary has fallen by 1% in 38 major cities, Reuters reported. Retail sales rose 5.4% year over year in August, an improvement from the 2.7% increase in July but still a far cry from pre-pandemic levels of more than 7%.
A quarterly survey by the People’s Bank of China found that nearly 60% of respondents in the country said they now save more than they spend. According to Reuters, the pre-pandemic level was 45% in 2019.
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“Amid the difficult job market and strong downward economic pressure, young people are experiencing a sense of insecurity and uncertainty that they have never experienced,” said Zhiwu Chen, associate professor of finance at Hong Kong University Business School.
When China will move away from its zero-COVID policy is unknown. In addition to subsidies for cars and other shopping vouchers, the legislature has so far focused on the infrastructure to boost the economy.
China cut interest rates this year to stimulate the economy, the only major economy to go this route. In addition, China’s largest state-owned banks cut interest rates on personal deposits on Sept. 15 to boost spending over savings.
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