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BEIJING — Today, at a diner in the Chinese capital that serves cheap food to seniors, much of the crowd is decidedly younger than the elderly.
For Wang Ran, a 27-year-old designer, a lunch at a restaurant in Beijing costs about part of what she would pay, making a big difference as she cuts back on spending amid an economic downturn in China that could have global consequences. aftermath.
Previously, Wang said, “I used to buy things I saw, everything I liked. But this year, I’ll possibly have to think a little more about the monetary aspect.
Decades of breakneck growth have transformed China into the world’s second-largest economy and lifted hundreds of millions of people out of poverty, pushing the middle class from 3% of the population in 2000 to more than 50% in 2018, according to Pew. Research Center, which defines China’s average elegance as living on between $2 and $50 a day.
For decades, this fashionable economic miracle supported the ruling Chinese Communist Party, which promised China security and prosperity in exchange for serious restrictions on political freedom. But a new era of slower expansion has created uncertainty for China’s more than 700 million middle-class people. the largest in the world.
China’s economy continues to grow, up 5. 2% last year, according to official data. This compares with an average annual expansion of around 7% over the past decade and more than 10% in the 2000s. Some economists say this year’s expansion target is around 5%. The % is too ambitious.
The slowdown means that middle-class Chinese can no longer expect continued economic gains or that their children’s quality of life is better than theirs.
Economic considerations have led Chinese President Xi Jinping to establish relationships with foreign corporations and governments, adding that the United States. At a meeting with an organization of U. S. CEOs in Beijing last month, he said China’s economy was “healthy and sustainable,” an achievement that “cannot be separated from foreign cooperation. “
But he has also made clear that his most sensible priority is national security and the economy, championing measures such as an expanded anti-espionage law that have alarmed foreign companies. His government has also been reluctant to offer consumers incentives to stimulate spending. for fear of selling “welfarism”.
Even as China reports stronger economic data, public sentiment remains anxious, said Scott Kennedy, senior adviser and chairman of the Chinese business and economics board at the Center for Strategic and International Studies in Washington.
“China is suffering from its own edition of long Covid,” he said in an interview in Beijing last month.
The country’s exit from three years of pandemic isolation has been “pretty bumpy,” Kennedy said.
“There’s the housing market facing headwinds, developers are collapsing and costs are falling in other cities,” Kennedy said. “This is the main asset that Chinese families have. “
In addition to the asset crisis, China is also grappling with public debt, a stock market collapse, and a decline in exports and foreign direct investment amid geopolitical tensions.
Chinese officials acknowledge a desire to shift the country’s growth style from real estate to consumption and have vowed to take steps to stimulate household spending. But the public doesn’t seem to agree: Data shows the savings rate hit a record high in February. while customer confidence is near an all-time low.
The reluctance of Chinese consumers may simply be a challenge for the U. S. and other countries, which have expressed growing considerations about the option of Chinese exports flooding their markets in a bid to locate consumers willing to spend.
During a visit to China that ended Tuesday, Treasury Secretary Janet Yellen focused on what she calls excess production capacity, specifically electric cars and solar panels, two sectors that U. S. officials are looking to expand at home.
Chinese officials say such accusations of overcapacity are groundless and that foreign governments should curb China’s development.
Economic anxiety is a visual China.
On social media, users are sharing money-saving tips. Public libraries are full of working-age people looking for job openings and polishing their resumes or just want an open position.
Young urban professionals also appear to be seeing a surge in lottery ticket sales, which reached a record 580 billion yuan ($80 billion) last year, according to data from the Ministry of Finance. About 85% of buyers were between the ages of 18 and 20. 34, up from about 55% in 2020, Chinese research firm MobTech reported.
China’s youth face a higher unemployment rate, which reached 14. 9% in December for 16- to 24-year-olds, with 8% in the United States, according to the Federal Reserve.
Chinese professionals who are further along in their careers also face precarious jobs, some for the first time.
Li Junwei, 39, lost her position as a director at a company in Beijing earlier this year. “Many other people in the same situation as me and in the same diversity of ages have already been laid off,” he said.
Li, who said she was so committed to her task that she worked until the day her baby was born, spoke about her experience in a video widely shared online. This has resonated with mid-career professionals who fear companies, especially in the tech sector. , will move away from them in favor of younger people with a lot of power and less personal responsibility, a concept known in China as the “35-year curse. “
“The common fear is that after dedicating a significant portion of our young people to a business, when the time comes for the company to give back to our families, there is a threat of being fired,” Li said.
Li is now exploring new painting opportunities, he said, “but it’s not yet clear whether they will be able to materialize or my family. “
He said many of those who lost their jobs were leaving “top-tier” Chinese cities such as Beijing, Shanghai and Guangzhou for their hometowns, where “making ends meet shouldn’t be a problem” given his background in painting.
Li has also returned to his hometown in Shandong province, but leaving Beijing may simply mean missing out on educational opportunities for his 3-year-old son.
“If it doesn’t work out, I can go back to my small town and settle for a life for my son,” she said. “That would be a last resort. “
Financial pressures are also fueling a trend called “reverse consumption,” in which consumers focus more on value and cost than brand. It’s a blow to foreign luxury brands such as Gucci, whose French parent company, Kering, warned last month of a sharp drop in sales. in the first quarter, largely due to poor functionality in the Asia-Pacific market.
Vika Chen, 29, said her current spending philosophy is to “save where you can and spend where you want. “
“When it comes to unnecessary expenses, I tend to prioritize pieces that offer a higher cash price or opt for less expensive alternatives,” said Chen, who works in public relations in Beijing.
She and her friends change clothes, buy in bulk or on discounted platforms, and buy movie tickets from less expensive third-party vendors. Chen said he spends less on lunch on those days and orders fewer dishes, but since his duties are limited by budget considerations, he eats at the same place all week.
Chen said it’s a matter of mindset and it’s vital not to compare yourself to others.
“To me, having a short temper makes me happier than living a sumptuous lifestyle,” he said.
Janis Mackey Frayer reported from Beijing and Jennifer Jett from Hong Kong.
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