In the first quarter of the year, bank savings nationwide increased by 6.47 trillion yuan, 400 billion yuan more than the growth in the same period last year, data from the People's Bank of China, the country's central bank, shows. It means more than 70 billion yuan were put into banks every day on average from January to March.
According to a survey released by the bank in late April, 22 percent of urban residents tended to "increase consumption" in the first quarter, down 6 percentage points quarter-on-quarter; 53 percent preferred "saving more", up 7.3 percentage points; and 25 percent preferred to make "more investments", down 1.3 percentage points.
In contrast, the total retail sales of consumer goods dropped 13.5 percent year-on-year to reach over 13.87 trillion yuan from January to May, according to the National Bureau of Statistics, although the figure rebounded in a month-on-month context.
Zhao Haoxing, a professor at Zhejiang Gongshang University, says a reason for the decline in consumption and growing willingness to save is that the public is worried about the future-how the pandemic will progress globally and domestically, affecting society and the economy, especially jobs and incomes.
"It's more a protective response that people will have in a time with much uncertainty," Zhao says.
"Before, only elderly people had the habit of setting aside money. Now the youth are following."
Benoit Garbe, senior partner at the consultancy Prophet, says consumers who have the spending power will reassess their definition of "premium", seeking more pragmatic, tangible superiority in brands they purchase and place greater value on responsible buying.
Young shoppers are learning to offload used possessions and embracing a more sustainable attitude, he says, adding that Chinese social media also saw the rise of "ditch your stuff" initiatives, and secondhand or flea-market apps.
Douban, a social media platform that many youngsters use, recorded a growing number of discussions around topics like "reduce consumption", "minimalist life", "saving money" or "don't buy clothes for 100 days".
While these discussions on social media might have started as a sign of lifestyle changes, and as it became clearer that the economic recovery might take longer than expected, young people have started to realize that they might have to go through more hardship, and that the virtue of saving might come handy to face the new reality, says Alain Lecouedic, partner at the consultancy Roland Berger.
Consumption has become a major driving force of the Chinese economy and contributed 57.8 percent to the country's GDP growth last year.
If the "retaliatory saving" trend continues or amplifies, consumption will not lift the GDP as strongly as anticipated, he says.
While such sectors as retail consumption, travel and hospitality have been hit hard by the outbreak, some sectors such as online games, videos, music and livestreaming have benefited, Lecouedic adds.
A report by Chinese tech company Tencent in December found that Chinese born after 1990 had a strong sense of money management.
About 84 percent of the young interviewees said they had a habit of managing money, and that the more they spent on finance, the stronger their sense of happiness was.
Lecouedic suggests Chinese youth should be financially conservative on spending and investment to preserve and protect cash and create reserves.
It may be a thing of the past for young people who are already employed to switch jobs frequently to get better packages, and securing their existing positions and income sources may be wiser, he says.
