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China's young generation gets thrifty in gloomy economy
Sun Jan 4, 2009 7:22pm EST
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By Michael Wei
BEIJING (Reuters) - China's office workers are tightening their belts, cutting back spending on everything from clothes to fast food, despite government efforts to boost consumption to stave off the worst effects of a global recession.
Websites and blogs popular among young Chinese professionals are extolling the virtues of frugality as the global financial crisis bites China's economy.
Wang Hao, a 24-year-old Beijing office worker, launched his campaign in June to curb weekly living expenses to 100 yuan ($14.60). So far, he says, he has 55,000 participants.
"The financial crisis has apparently given a lesson on spending to young people in China, including me," said Wang, who posted his campaign on a popular forum and on his blog blog.soufun.com/whblog. The blog has had 178,000 hits.
China has enjoyed phenomenal economic growth for years, giving a huge boost to its domestic consumption. Young consumers, mostly in their late twenties and early thirties, would spend as much as they earned, if not more, on designer clothes, electronics, entertainment and a wide variety of consumer goods.
Now, at least, some are becoming thrifty.
Besides Wang's cost-cutting crusade, another website is running a similar "100-yuan for a week" campaign, and still other Internet forums and websites offer budget tips, including recipes for meals that cost under 10 yuan ($1.46).
One website offers "Ten Mottos for Financial Winter" with a list that includes avoid quitting your job, starting a business, buying a car and having a baby.
These cost-cutting campaigns are in sharp contrast to a government drive to encourage spending amid rising unemployment and slowing retail sales as the global economic crisis hits Chinese manufacturers with canceled orders and factory shut downs.
Officials in Beijing are determined to "protect eight," shorthand for the goal of achieving 8 percent growth this year.
That is the minimum rate deemed necessary to maintain social stability and provide jobs for the 15 million plus people that enter China's job market every year.
It is a top priority of the Communist Party and the government has allocated 4 trillion yuan (around $586 billion) in spending to help achieve the goal. However, some economists wonder if that will be enough to prop up domestic spending.
While still mostly a grass-roots campaign, cost-cutting drives are indicative of slumping consumer confidence in China and could take a toll on the economy if they become even more widespread, said Lin Songli, a senior analyst with Guosen Securities in Beijing.
"Though not quantifiable, confidence is crucial for the economy," he said.
About 46 percent of Chinese said their country's economic situation was good in November 2008, compared to 90 percent in 2007, according to an Ipsos survey published in December. Continued...
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