Young Adults in China Are Living Beyond Their Means
Many working young adults in China developed a “Jing Zhi Qiong” (精致穷) lifestyle. Living out of their budget, they finance their affluent lifestyle on credit or via instalments.
The Young Generation in China Is In-Debt
According to Nielsen’s report on China’s younger generation’s liabilities, many young adults are in debt. On average, among the young Chinese adults born in the 1990s and 1995s, their debts are 41.8% of their revenue. These debtscome mainly from borrowing, such as instalment payments and credit card debt, which have taken up 37.2% of their debts. While many Chinese people are liable for housing and car loans, it only accounts for a small part of young people’s debt (4.6%).
It is clear that the young generation has an unnecessary financial burden as they overspend. Multiple reports also indicate that many individuals are dissatisfied with their pay at all income levels in China. This feeling of dissatisfaction is also prevalent for those who earn more than RMB30,000 (US$4,700) a year. According to DT-Tamen, 60.0% of the people with an annual salary between RMB100,000 (US$15,800) to RMB200,000 (US$31,600) are dissatisfied with their financial situation. In addition, 34.0% of those with an annual salary of RMB300,000 (US$47,500) to RMB500,000 (US$79,100) are also discontented with their financial condition.
The Risks of Maintaining an Unaffordable Lifestyle
An increasingly large group of young adults in China leads an affluent lifestyle, even though they cannot afford it.Instead of living frugally on normal days to prepare for the rainy days, they overspend on a daily basis. This lifestyle, also known as “Jing Zhi Qiong’’ (精致穷) in Chinese, has nothing to do with one’s earnings. It is about how individuals spend more than they can afford at their various income levels. This group of people are more inclined to pursue a higher standard of living than they did before. Essentially, they are living out of their means. “Jing Zhi Qiong” people crave all sorts of fancy and popular things even when they do not earn sufficient to maintain their financial security. They seek all kinds of ways to obtain what they want, even if it is via instalment payments or loans.
In China, even though people’s incomes and standard of living are steadily increasing, society’s expectations have also become higher. They want to outshine their peers, even if it is only for show. As loans are now readily available everywhere in China, these impetuous young adults are starting to realise they cannot live without credit platforms such as Huabei, Weilidai, JD Baitiao, etc. After all, borrowing quick cash is the most convenient method to avoid the agony of finding ways to earn more money. At the same time, these unhealthy ideologies of overconsumption are further spurred on by these credit platforms. For instance, Huabei’s slogan is “Just spend it”. This stimulates an adrenaline rush and gratifies people’s vanity, causing many to make an impulse purchase on credit. In this trend, it should come as no surprise that in 2019, the market value of the Chinese P2P lending industry reached RMB 1.97 trillion (US$311 billion).
In some way, the happiness that “Jing Zhi Qiong” can bring does have the potential to temporarily help one escape from the dreadful depression in life. However, taking shortcuts to the classy lifestyle one desires and living on credits instead of building up savings will have consequences. There will always be rainy days, such as unexpected accidents, layoffs and illnesses. How would one be financially able to live through those days when in debt? Besides, we should never underestimate the greed, laziness and cowardice in human nature. The frequent use of credit lending sites can easily lower an individual’s willingness to work hard, preventing him or her from climbing out of debt. As a result, individuals get stuck in a state of depression and the feeling of powerlessness.
A shift in mentality might be helpful. There is no shame in not living a lifestyle we want to live. Many have heard Tammy Lally’s lecture on “Let’s get honest with our money problems”. In the lecture, she pointed out the phrase “money shame”, which means “the painful feeling believing that you are unworthy of love based on your bank account balances, your debts, and your job titles.”
She advised that “money shame” is not helping with the situation. Our self-worth should not equate to our financial ability. We should also guard against the trap set by consumerism. Brands stimulate consumption by luring individuals who crave a sense of belonging in society when they buy into the hype. When we buy things out of the belief that spending money is the key to a better life, we are making a move in a contradictory direction. It is a common wish of all humankind to live a better life, yet it is unnecessary to drag ourselves into poverty and financial insecurity. It is easy to get blinded by vanity and the desire to show off. We should cope with temptation appropriately and advocate for moderate consumption by departing from reality when our desired goods are still far away. That could be where the breakthrough from suffering is.
Retailers Seizing the Opportunity to Reap Profit
“If only I can get those things without paying that much” is the one mentality the credit platforms are building on. When “Jing Zhi Qiong” becomes a typical lifestyle adopted by young people to enjoy a more exquisite consumption experience in the most economical way, retailers joined the party by catering to “Jing Zhi Qiong” people’s rising demand are making a fortune out of it.
For example, there is a recent “beauty sample boom’’ of retailers selling beauty samples in China. Young adults are showing unprecedented enthusiasm for big-name beauty samples. In contrast to the original products costing a few hundred or thousands, beauty samples are pricing their products strategically for “Jing Zhi Qiong ‘’ people, decreasing the cost of errors in scouting for their suitable beauty products. HARMAY, one of the beauty sample merchants, managed to break even in four months after its appearance, while most of the brick and mortar stores selling beauty products can only do so in 12 months on average.
In addition, near-expired food has become a new fad among China youths in recent months. Buying more snacks with much less money, for instance, is another opportunity to satisfy covetousness with minimised cost. For example, a nuts gift set for “Three Squirrels” cost RMB159 (US$25) originally, but the price can drop to RMB22.90(US$3.60) when there are 45 days left till it is expired.
Realising their desires at a guilt-free price, no wonder “Jing Zhi Qiong” individuals are so obsessed with the new rising economy. People enjoy this false sense of achievement and have new demands for things due to merchants’ advertisements. When these cheaper substitutes are praised for being a “better choice” all over social media, these people are blinded by the hype and overlook all consumption traps.
The beauty sample market also thrived on “Jing Zhi Qiong” individuals’ demand for cheap substitutes, although the authenticity of beauty samples remain questionable. In January 2021, after being reported by a customer, a beauty sample merchant could not provide the customs officers with proof of the legal origin of goods. As a result, products worth RMB300,000 (US$47,500) were detained. As pointed out by Xin Zhou Kan, it is unlikely for these beauty samples to be authentic. The production in batches in other factories is a more logical reason to explain a large amount of sample supply. Purchasing agents separating the original product with beauty samples could be another source for authentic sample products. However, the sum of all the above sources is far from the current market circulation level. Therefore, it is reasonable to question most of the beauty samples in the market. Those selling through e-commerce or brick and mortar stores can be imitations and cause skin problems.
Consumption of near-expired food in the heat of the moment due to pricing is also not as commendable as most fans believe. Most of the foods put in the interim are not likely to be popular brands. Besides, what many people do not know is that these discounted foods claimed to be “nearly expired” are already expired. Some merchants will collect and change the printed production date, as revealed by Vistaweek. Take canned beers as an example. The cost to reschedule 300 cans is only RMB0.06 each. Goods with rescheduled dates can be seen everywhere in small supermarkets in Shanxi and Hebei, such as expired Kangshifu instant noodles, Red Bull drinks and Daliyuan bread.
Things you cannot afford before are unlikely to be readily available overnight. Before joining the buying spree, “Jing Zhi Qiong” people should think about whether their desire for those “cheap” goods is out of their authentic needs or the illusion of obtaining more things and saving money at the same time.
