China's government aims to increase domestic consumption to stimulate economic growth. However, recent graduates demonstrate a tendency towards increased frugality. Youth unemployment has remained around 20%, and the ongoing property market instability contributes to uncertainty regarding home ownership, particularly in urban areas. This environment has fostered an increase in frugal practices among young people, shared widely across social media platforms.
Embracing Frugality
Online content creators have promoted minimalist lifestyles and budget-conscious consumption. One 24-year-old influencer, known as Zhang Small Grain of Rice, showcases personal care routines using basic products and highlights durable, cost-effective clothing items to her 97,000 followers on Xiaohongshu. She states her objective is to help individuals understand "consumption traps" to promote savings and reduce stress.
Another individual, a 29-year-old identified as Little Grass Floating In Beijing, shares videos demonstrating preparation of basic meals, reporting costs of slightly over $1 for two meals. He attributes his modest lifestyle to his background and claims to have saved over $180,000 over six years while working for an online sales firm. When questioned about future living standards for a potential family and his long-term goals, he stated, "I don't know."
National Economic Context
Analysts indicate that China faces long-term economic challenges if domestic spending does not increase. Unlike some economies where high credit card debt is a concern, China's population traditionally exhibits a higher propensity to save, a trend exacerbated by perceptions of economic uncertainty. Despite government efforts to boost household consumption for years, it currently constitutes approximately 39% of Gross Domestic Product (GDP), in contrast to about 60% in many developed nations.
Surveys and interviews suggest a more pessimistic outlook among younger generations compared to the 1990s and early 2000s. A young woman in Beijing reported a reduction in salary and concerns about job security, stating, "making money is more important to me. I actually need to expand my income sources and cut my costs." High youth unemployment can contribute to wage stagnation as employers face less pressure to offer higher compensation due to a competitive job market.
Employment Challenges and Skills Mismatch
Many young adults, including university graduates, report difficulty securing employment in their specialized fields. One man in his 20s noted the availability of low-level jobs but a scarcity of suitable opportunities within areas of expertise, citing friends who are unemployed despite having degrees in fields such as financial services and product sales. He expressed pessimism regarding an imminent improvement in the economic climate.
Economist George Magnus of the China Centre at Oxford University has observed a trend where university graduates, including those with master's degrees, are accepting jobs as delivery drivers. This phenomenon is indicative of a skills mismatch between higher education qualifications and existing labor market demands. The national strategic focus on developing high-tech industries, such as robotics and Artificial Intelligence, may currently contribute to reduced labor intensity in these sectors, further impacting job opportunities.