In China, an intriguing trend of revenge saving is emerging, as young people are becoming more cautious with their spending due to the country’s struggling economy. Despite the prevalence of post-pandemic revenge spending, Chinese youth are diligently saving instead of indulging in impulsive purchases.
Christopher Beddor, deputy director for China research at Gavekal Dragonomics, notes that the economic downturn has led young people to become more cautious with their spending. Household deposits in RMB saw significant year-on-year growth in the first quarter of 2024, indicating a shift towards saving rather than spending. Even though better-than-expected GDP growth was recorded in the first quarter, forecasts suggest a continued slowdown in the economy.
The tight labor market in China is exacerbating the situation, especially for young people. Jia Miao, assistant professor at NYU Shanghai, notes that many young individuals are struggling to find jobs or increase their income, leading them to spend less money. The unemployment rate among youths aged 16 to 24 is significantly higher than the national average, further contributing to the saving trend among Chinese youth.
The disappearance of confidence and animal spirits among young people is a notable concern. Experts predict that it may take years of economic growth before they feel comfortable indulging in revenge spending. The current economic challenges in China are prompting a shift towards saving rather than spending among the youth, reflecting a cautious approach to personal finances in light of the uncertain economic climate.
In conclusion, while post-pandemic revenge spending may still be prevalent among some groups globally, an interesting trend of revenge saving is emerging particularly among Chinese youth who are becoming more cautious with their spending due to their country’s struggling economy and tight labor market. This shift towards saving reflects a cautious approach to personal finances amidst an uncertain economic climate and could have long-term implications for future generations.
