In recent years, a phenomenon known as revenge saving has emerged in China, where young people are saving their money aggressively instead of making impulsive purchases. The ongoing trend of post-pandemic revenge spending in many parts of the world is overshadowed by this cautious approach to spending in China.
The 11.8% year-on-year growth of total RMB deposits by households in the first quarter of 2024, reported by the People’s Bank of China, reflects this trend. Despite China’s first-quarter GDP surpassing expectations with a 5.3% year-on-year growth, forecasts indicate a continued slowdown in the economy. The International Monetary Fund predicts a 4.5% growth in 2025, which is much lower than expected.
Unemployment rates among young people are particularly high in China, with an unemployment rate of 14.2% among youth aged 16 to 24 in May, much higher than the national average of 5%. Many young people are spending less money simply because they cannot find jobs or struggle to increase their income. With the average monthly salary for undergraduates in China at 6,050 yuan ($832) in 2023, only a 1% increase from the previous year, it is not surprising that confidence and spending among the youth have diminished.
Rein, a market expert, believes that it will take years or even longer for young people to regain confidence and feel comfortable enough to engage in revenge spending. The current economic climate in China is challenging, and the trend of revenge saving among the youth reflects their concerns about the future.
In summary, while many parts of the world are experiencing post-pandemic revenge spending trends, young people in China are taking a different approach by aggressively saving their money due to economic struggles and joblessness concerns.
Despite ongoing efforts by governments worldwide to stimulate economic recovery following pandemic disruptions
