Letters | Why China should give young people cash to spend

Readers discuss what is holding back China’s economic recovery, private school finances, and what makes Hong Kong a more attractive destination than Seoul or Tokyo

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People pack out a job fair in Shenyang, Liaoning province, on October 22. Youth unemployment remains high in China. Photo: AFP

Published: 11:30am, 28 Dec 2024

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In the incisive opinion of Gao Shanwen, a prominent Chinese economist, China is full of “vibrant old people, lifeless young people and despairing middle-aged people”, at a time when youth unemployment in the country remains high.

Meanwhile, recent consumption data deviated from the recovery track, with retail sales increasing by only 3 per cent year on year in November, down from 4.8 per cent in October. As Gao pointed out, young people with diminished job and income prospects have curbed their consumption activity, unlike the elderly.

However, not all of Gao’s peers agree. Hong Hao, another economist who is popular on the internet, argued – hilariously – on Bloomberg Television that some of the elderly spending may be attributable to young people who, after all, receive pocket money from the generation of pensioners. It certainly reflects the lived experience of the different demographic groups in China.

Going by the two economists’ arguments, it would be quite reasonable to infer that China’s young people are willing to spend if they are able to. In the context of China’s downturn, it might be said that spending power is just not in the right hands.

Among older Chinese, there is a long-held habit of saving more or spending as little as possible. In effect, China’s welfare system is paying billions of yuan each year to those who are the best at saving money.