Young Chinese people are sapping their energy from consumption as a result of massive job losses, in marked contrast to the spending habits of the elderly that have remained stable since the pandemic, according to a prominent Chinese economist.
While China’s aging demographics could hamper the economy in the long run, the elderly increasingly stand out for their healthier finances and resilience, according to Gao Shanwen, chief economist at SDIC Securities, who has previously advised regulators and senior officials in… The country.
“The younger the population of a county, the slower its consumption growth,” says Gao He said With an investor conference in Shenzhen on Tuesday, citing his analysis of regional data. In public remarks broadcast live on several platforms, he described China’s post-pandemic society as “full of vibrant old people, lifeless young people, and desperate middle-aged people.”
The stark remarks quickly caught the attention of social media in China, including Weibo, where videos and transcripts of Gao’s speech went viral. This frankness was unusual at a time when local analysts are trying to tone down or even censor certain words such as “deflation,” and officials are calling for a more positive discourse about the economy.
Less than four years ago, the People’s Daily, the mouthpiece of the ruling Communist Party, praised the youth as a spending powerhouse. Saying They have become “the main consumer group for many popular products.”
Retail sales have slowed since the spread of Covid-19 worsened in 2022, as consumer confidence was hit by pandemic measures as well as China’s worst real estate crisis in modern history. As the economy slows, widespread salary cuts and layoffs have strained household budgets and curbed spending.
Although the recent government campaign to support the purchase of cars and home appliances has led to… recovery In consumption, its growth is still well below pre-pandemic levels.
Before the pandemic, there was not a strong correlation between the region’s consumption growth and its demographic patterns, according to Gao. He added that the shift in recent years reflects the fact that pensions for retirees have remained stable, while job opportunities for young people have diminished.
“At least for young people, their confidence in future income has declined significantly, their spending activity has been curbed, and their desire to buy homes has been curbed,” he said. “But all these problems do not exist for the elderly.”
Youth unemployment remained high at 17.1% in October, more than three times the nationwide unemployment rate in urban areas.
There may be a total of 47 million people who have been unable to find formal work in cities over the past three years even though the official unemployment rate has remained stable, Gao said, citing his analysis of pre-pandemic trends in urban employment numbers. . That’s equivalent to 10% of China’s urban workforce last year, based on Bloomberg calculations using official statistics.
He added that these people may have returned to their hometowns in the countryside or turned to temporary jobs, which means they were not counted in the official statistics. last Independent analyses They also noted that the labor market is weaker than official data shows.
In another bold statement, Gao estimated that China’s GDP may have been overextended by 10 percentage points over the past three years, based on his analysis of the discrepancy between data on economic growth and expansion in areas such as consumption, investment and development. Work force.
A number of other economists have done so He doubted Accuracy of official data on GDP growth in 2022 and 2023.
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