As a result, some young people prefer to save than splurge.
“I used to go see two movies every month, but I haven’t stepped inside a cinema since the pandemic,” said Fu, an avid movie fan.
Retail sales in China rose just 2.7 per cent year-on-year in July, recovering to 5.4 per cent in August but still well below the mostly 7 per cent-plus levels during 2019, before the pandemic.
Almost 60 per cent of people are now inclined to save more, rather than consume or invest more, according to the most recent quarterly survey by the People’s Bank of China (PBOC), China’s central bank. That figure was 45 per cent three years ago.
Chinese households overall added 10.8 trillion yuan (US$1.54 trillion) in new bank savings in the first eight months of the year, up from 6.4 trillion yuan in the same period last year.
That is a problem for China’s economic policymakers, who have long relied on increased consumption to bolster growth.
China is the only leading economy that cut interest rates this year, in an effort to spur growth. China’s big state-owned banks cut personal deposit rates on Sep 15, a move designed to discourage saving and boost consumption.
Addressing the rise in people’s inclination to save, a PBOC official said in July that when the pandemic eases, the willingness to invest and consume will “stabilize and rise.”
The PBOC did not respond to Reuters requests for comment; neither did China’s Ministry of Commerce.
“10 YUAN DINNER”
After years of increasingly ardent consumerism fuelled by rising wages, easy credit and online shopping, a move toward frugality brings young people in China closer to their more cautious parents, whose memories of lean years before the economy took off have made them more inclined to save.
“Amid the tough job market and strong downward economic pressure, young people’s feelings of insecurity and uncertainty are something they never experienced,” said Zhiwu Chen, chair professor of finance at Hong Kong University Business School.
Unlike their parents, some are making a show of their thriftiness online.
A woman in her 20s in the eastern city of Hangzhou, who uses the handle Lajiang, has gained hundreds of thousands of followers posting more than 100 videos on how to make 10 yuan (US$1.45) dinners on lifestyle app Xiaohongshu and streaming site Bilibili.
In one minute-long video with nearly 400,000 views, she stir-fries a dish made from a 4-yuan basa fillet, 5 yuan of frozen shrimp, and 2 yuan of vegetables, using a pink chopping board and pink rice cooker.