A joint survey of over 3,500 people by China Youth Daily and the website qq.com last week shows that 63.7 percent of young Chinese professionals will face an increase in their daily expenses this year due to a sharp rise in prices.
One man interviewed, Mr. Tian, works in a Beijing-based joint venture. He said he must break a promise made to his wife about taking a European trip, even though he was promoted to a higher salary last year.
"We must use the money where it is needed most," said Tian. According to Tian, he plans to pay off his car loan this year and housing debt within 10 years. "We're struggling with hundreds of thousands of yuan in debts," Tian lamented.
"My son is only two years old, but my wife and I have already established an account specially for his future schooling, because I want him to succeed. The best early education centers in Beijing can cost anywhere from ten to one hundred thousand yuan. So we have to do all we can to save money and won't consider luxuries like travel until we get retired."
Mr. Tian doesn't think his situation is uncommon, explaining, "Prices increase every year because of inflation and people understand that. For example, the money which could buy you two buckets of cabbages ten years ago can only buy one or two cabbages nowadays."
What puzzles Mr. Tian a great deal is why responsibilities his parents' generation didn't find difficult to handle, such as housing, healthcare and childcare, now keep his generation constantly on the run.
The survey revealed that 51.9 percent of people will spend the majority of their money on housing this year, 49.7 percent on transportation, 46.8 percent on childcare, and 36.1 percent on medical expenses.
Those who are more willing to invest in clothing, advanced study, and entertainment are younger and unmarried with a smaller economic burden, according to the survey.
The central government has issued a series of policies to help control the continuous increase of housing prices, but the measures have proved ineffective. Mr. Tian said that the housing price of his residential area has increased by nearly 3,000 yuan over the past two years. Statistics from the Ministry of Health also show that 48.9 percent of Chinese people would rather suffer from the torments of diseases than go to see doctors because they can't shoulder the burden of high medical fees.
In addition, educational spending is a big headache for most Chinese families. This year is the Year of Golden Pig, which traditionally symbolizes good luck, and many young couples plan to have a baby this year, adding the costs of family planning into their spending plans. "Tuition fees are a minor expense compared with school selection fees and necessary supplies," some parents complained.
Wang Ning, a professor with the Department of Sociology at Sun Yat-sen University, analyzed that the items at the top of spending lists in the survey are required expenditures for daily life, reflecting the fact that the pressures faced by young professionals are heavier than those by the people aged above 45.
A woman interviewed, Ms. Wang Shan, is famous for extreme stinginess among her friends. Having worked for eight years, Wang bought an apartment and has more than 200,000 yuan (US$25,800) in bank savings. She insists on taking a bus home even when she feels exhausted after a day's shopping. Her hobby is to balance her deposit books before going to bed every day. "So far I have a stable job and income, but who can predict the future? If I don't save enough money now, who will bear all the medical expenses when I am sick and old?" she said.
Su Ning, vice president of the People's Bank of China, said recently when interviewed by the China Youth Daily that China's final consumption proportion in gross domestic product (GDP) has dropped from 62 percent in the 1980s to 52.1 percent in 2005; some experts even predict the figure will stand at less than 50 percent in 2006, recording an all-time low. Additionally, Chinese residents' consumption ratio has dropped from 48.8 percent in 1991 to 38.2 percent in 2005.
Normally, the consumption capabilities and confidence of younger citizens should be much stronger than those aged above 45, but recently they have been limited, Prof. Wang Ning said. "Their expectation for future income is comparatively low while their expectation for future expenses is comparatively high. This has resulted in reluctance on the part of young people to spend their money," Wang said.
Prof. Wang stressed that although the central government tries its best to encourage people to consume by means of reducing interests and imposing interest taxes, people seem to take little notice of these and continue to save money, with residents' bank savings continuously increasing over recent years.
"Some analysts say Chinese people's consumption is irrational, but that's incorrect," said Wang. "It is actually very rational. People's consumption confidence is decided by the government's policies. Housing prices have increased for consecutive years and disputes on medical system reform still exist. Young people have to save money on medical treatment and extras for themselves, their parents, and their children."
To help raise young people's consumption confidence, the central government must begin with policy reforms, Prof. Wang suggested. "For example, we must improve the social security system. In this way, people can really enjoy the achievements brought about through China's development."
(China.org.cn by Li Jingrong, March 22, 2007)