Page last updated at 13:21 GMT, Wednesday, 7 January 2009

China's newly frugal youths

By Gemma O'Neill and Shuvra Mahmud
BBC News

Chinese yuan
Many young Chinese workers are having to learn to cut back

Amid the global economic downturn, young people in China are defying government initiatives to boost spending and coming up with novel ways to save money.

Back in July 2008, Wang Chao, a 28-year-old office worker from Shanghai, told the BBC he spent 2,000 yuan (then about $290; 150) in a single day on trainers, clothes and gadgets.

But when last month his company cut salaries by half, Wang said he was forced to cut back on luxuries and swap restaurant meals for homemade packed lunches.

"My monthly income has been cut by 50%. I have had to reduce my living costs, though I'm still able to eat well."

Blogs and popular internet forums are full of stories and advice from young people looking to stretch their money further.

This is despite the government's allocation of some $586m-worth of funds to encourage spending to keep China's economic growth around what it believes is the minimum necessary to maintain social stability.

'Stingy group'

The young savers, or the "kou kou zu" ("stingy group"), come from the generation born around the 1980s; now 20- and 30-somethings who have been regularly accused of being spoilt and lacking financial awareness.

This is not just a response to the crisis - it's something you can benefit from your whole life
Zhang Yan
In large cities like Beijing and Shanghai, young white collar workers were well-known for their ability to overspend. A recent Shanghai government survey revealed that office workers in the city spent an average of 2,500 yuan per month - a disposable income beyond the grasp of most Chinese.

By contrast, the kou kou zu are eschewing restaurants for school and company canteens; taxis and public transport for bicycles; and high street shops for online ones. It remains a grassroots movement, but it appears to be growing.

Zhang Yan, a "kou kou" from Fujian province, said learning to spend wisely had been more than just a reaction to the global recession.

She told the China Daily newspaper: "This is not just a response to the crisis - it's something you can benefit from your whole life. Plus, it is environmentally friendly and represents a healthy and positive life attitude."

Chinese woman tries on clothing
For some, the shopping spree has come to an end
In 2006, Ms Zhang set up an online accounting system - - to help others like herself to balance their budgets.

More than just an accounting system, the website allows users to discuss money matters, comment on posts about cost-cutting homemade dishes, and remind each other to record their expenses.

Other websites promoting money-saving campaigns have become increasingly popular.

Wang Hao, a 24-year-old Beijing-based photojournalist, has recently been posting on his blog on how to live on 100 yuan a week.

At the last count his blog - - had received some 185,700 hits.

The Chinese social networking websites Douban and Kaixin Wang have also seen the emergence of similarly themed groups.

Feeling the pinch

Some analysts suggest that such measures are an indication of a loss of consumer confidence, which could ultimately exacerbate the problems affecting China's slowing economy.

Until recently, China's rapid economic growth meant it avoided the main affects of the global economic downturn.

World Bank predictions place China's growth at 7.5% this year, compared to around 9% just a few months ago, before the global financial crisis hit.

Wang Chao told the BBC that despite the gloomy outlook he feels fortunate.

"Even though I'm earning less than last year, I'm just glad I still have a job. I'm worried that there's going to be real trouble next year when so many people can't find a job."

As more feel the pinch, more are realising that China's good times may not go on forever.

Some are responding by joining the kou kou zu and limiting their spending - keeping money in the bank for the rainy day that few until now had forecast.

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