The situation in China is unique, but not much is heard from that nation as the media is not as open as in other parts of the world. Reports suggest that Chinese youth are not spending much like earlier but are on a strict saving mode.
The reason is the changed circumstances in the nation, with a lack of jobs, salary cuts, and difficulty finding new employment once a job is lost.
These threats have surrounded the Chinese youth since the extended COVID lockdowns. The economy slowed down, and the job market has not been bustling.
The young population, known for their luxury spending until a few years ago, is now in saving mode. This is counterproductive for the nation as it halts money circulation. The money remains in banks but not with businesses outside.
Due to this saving mode, many Chinese businesses are shutting down, and some are running at a loss, holding on to some hope for the future.
This strict saving is being called 'revenge saving.'
Savings measures also include eating at community canteens, usually meant for the elderly, where fresh meals are sold at relatively low prices.
Some people are even finding "savings partners" on social media, forming groups that help members stick to their savings goals.
A CNBC report includes a comment from Shaun Rein, Managing Director of China Market Research Group, saying, "Chinese youth have a revenge savings mentality. Unlike youths in the 2010s who often spent more than they earned and borrowed money to buy luxury items like Gucci handbags and Apple iPhones, young Chinese are now saving more."
"Confidence and Animal Spirits have disappeared among the youth. It’ll take years, if not longer, of a booming market before they feel comfortable enough to spend freely again," said Shaun Rein.
While the youngsters are in the process of revenge saving, the struggling businesses are just waiting for the light at the end of the tunnel.
