As the pandemic fades, a wave of “compensatory spending” and borrowing to spend has swept across the globe. However, young people in China are bucking this trend and embracing a new way of living: saving.
A trendy new movement on Chinese social media is the practice of setting strict monthly savings goals and documenting one’s progress. “Little Zhai Zhai,” a 26-year-old internet user, is one such person who strives to keep her monthly living expenses at just 300 yuan ($41.20). Even when it comes to food, she tries to spend no more than 10 yuan ($1.38).
Young people in China are also investing in gold as a long-term strategy for their financial future. While this was once the domain of middle-aged and elderly people, Gen Z (born 1997-2012) is now the target market for these products.
In addition to traditional savings methods, some young people are turning to “saving buddies” on social media to help them stay on track with their goals. They form groups and hold each other accountable for sticking to their budgets. One popular way to save is by eating at community cafeterias, which are often cheaper than restaurants and geared towards older generations.
The latest report from the People’s Bank of China shows that total household savings in yuan increased by 11.8% in the first quarter compared to the same period last year, indicating that young people are becoming more financially savvy in post-pandemic times. This trend stands in contrast with global consumption trends, where “compensatory shopping” emerged after the pandemic as a response from young people looking for ways to treat themselves after months of lockdowns and restrictions.
However, despite efforts by young people in China to save money, there are still challenges ahead for this generation. The unemployment rate among young people aged 16-24 was 14.2% in May 2021, much higher than the national average of 5%. Additionally, China’s real estate market has been struggling for three years now due to oversaturation and high prices, while its labor market remains challenging for many young people looking for work opportunities.
Despite these challenges, there is hope that young people will be able to start spending freely again someday as they regain confidence in their financial abilities after years of being cautious during the pandemic.
In conclusion, while some young people around the world may be tempted by “compensatory shopping” or borrowing money to spend recklessly post-pandemic, Chinese Gen Z is taking a different approach – saving money and making smart investments for their financial future.
