Millions of ambitious Chinese professionals have had their lives upended by President Xi Jinping’s decision to reshape the world’s second-largest economy, reports Bloomberg.
Industries such as finance, consumer tech and property — key drivers of China’s growth for much of this century — are now out of favour. Instead, the most powerful Communist Party leader since Mao Zedong is funnelling resources toward endeavours such as electric vehicles and chip production. “High quality” growth – and not “high speed” growth — is the new mantra.
Thomas Wu, a 43-year-old insurance executive in Shanghai, has been badly affected by the policy shift. He has suffered a 20 per cent pay cut in a nationwide push to lower salaries at state-owned finance companies. He worries about layoffs and wonders how he’ll find 600,000 yuan ($84,500) to keep his two children in international school.
Wu’s story reflects a broader trend in China. President Xi Jinping’s economic reshaping, prioritizing sectors like electric vehicles and chip production, has left finance professionals like Wu feeling adrift. Many are facing salary cuts and job losses, while being criticized for their affluent lifestyles.
Economic malaise
This malaise among the country’s best-educated workforce is deepening the economic gloom enveloping China’s $18 trillion economy. The stock market is struggling, consumer spending is weak, and deflation looms. There’s a sense of stasis, with little incentive for initiative and significant risk if things go wrong.
This situation raises a critical question: What happens when a country’s most talented workers are demotivated? It’s a dangerous undercurrent, threatening the narrative of prosperity through hard work.
While some argue these sacrifices are necessary for China’s economic transformation, the transition is leaving many behind. The finance sector, once a source of high salaries and prestige, is being squeezed. Interviews reveal professionals struggling to cope with pay cuts and increased scrutiny.
Finance isn’t alone. Consumer tech and real estate are also feeling the pinch. The once-dominant internet platforms – Baidu, Alibaba, Tencent — have shed thousands of jobs. Real estate, once a booming sector, is now in freefall, leaving many unemployed.
Economic uncertainty deterring childbirths
This economic uncertainty is fuelling pessimism and discouraging families from having children. The frustration has even spawned buzzwords like “tang ping” (lying flat), reflecting a desire to avoid excess work and ambition.
Mental health concerns are rising, particularly in the affected sectors. The sudden death of a female worker at Chinese International Capital Corporation (CICC), a partially state-owned multinational investment management and financial services company, has highlighted these anxieties.
While some applaud the crackdown on inequality, there’s a risk that punitive measures could harm the broader economy. The humbling of ambitious professionals sends a discouraging message.
Economists worried
Economists worry that China might be entering a deflationary spiral. Consumer confidence is low, and spending is weak. Even once-favoured global brands are reporting slowing demand.
This economic slowdown is fuelling pessimism and uncertainty. Many are leaving the country, and the birthrate is near a record low.
While widespread protests are unlikely, the Communist Party is clamping down on dissent. State-run media is denouncing phrases like “garbage time of history”, which describe a society where individuals feel powerless and failure is inevitable.
Back in Shanghai, Wu, who has sold his BMW and bought a Decathlon bike, goes on nightly bike rides, finding solace in a community of like-minded individuals. He’s adjusting to the new reality, hoping for better times for his children.
“All we can do during garbage time is pretend to work hard, avoid unemployment and stay healthy,” Wu said. It’s a stark statement, reflecting the uncertainty and anxiety gripping many in China today.