In the wake of the pandemic, a trend of “compensatory shopping” and borrowing to spend has emerged worldwide, while Chinese Gen Z has embraced a new approach to saving. The trend is evident on Chinese social media, where young people are setting strict monthly savings goals for themselves. For example, “Little Zhai Zhai,” a 26-year-old internet user, is striving to keep her monthly living expenses at just 300 yuan ($41.20).
In addition to simple savings, many Chinese young people are also investing in gold products as a long-term strategy. Traditionally thought of as a purchase made by middle-aged and elderly people, gold has become increasingly popular among Gen Z in China. This trend has been fueled by new terms such as “reverse spending” and “frugal economy,” which encourage people to cut back on spending and look for discounts when shopping.
The People’s Bank of China reports that total household savings in yuan increased by 11.8% in the first quarter compared to the same period last year. This contrasts with global consumption trends, where the wave of “compensation shopping” appeared after the pandemic. In fact, according to surveys by Bank of America and Intuit’s Wealth Report, many young people around the world have taken out debt to travel or prefer a vibrant life over saving money in the bank.
However, experts believe that this trend may not last forever. The International Monetary Fund (IMF) expects China’s second-largest economy to grow 4.5% next year but forecasts still tilt towards a slowdown due to challenges such as declining real estate sales and high unemployment rates among young people aged 16 to 24 in May were 14.2%, much higher than the national average of 5%. Despite these challenges, experts predict that Chinese Gen Z will continue their focus on saving and investing for the long term with an average salary for graduates expected to be up by 1% in 2023 at $832 per month