'Life is hard and we need to give ourselves treats," Qu Wenting, a 24-year-old white-collar worker at a media company in Beijing, recently posted on social media app WeChat, adding a photo of a new curling iron worth about 3,000 yuan ($421).

Qu started her job last year with a monthly salary of 4,000 yuan ($562). She said the high living costs in Beijing make it hard for her to save money. "Paying rent and daily expenses such as takeout food, as well as buying clothes and cosmetics are all very costly," she told Beijing Review.

But this has not stopped Qu from buying any big-ticket items she wants. "When I see something desirable, I want to have it right away to avoid regrets," she said.

According to Qu, she is used to buying on credit to meet her own demands through Huabei, a credit payment service of Alipay, an online payment platform of e-commerce giant Alibaba Group. Huabei allows users to buy now and pay later, usually by the following month.

Qu said she thinks such a consumption mode gives her the courage to spend ahead of time. Huabei makes her feel as if she's spending someone else's money, which relieves psychological pressure and improves the quality of her life.

Qu is not alone. According to a survey conducted by the People's Bank of China (PBC), the central bank, Chinese consumers' preference for delayed consumption has declined.

While the drop is not dramatic, expanding consumption is accompanied by declining deposit rates, Wang Jun, a member of the Academic Committee of the China Center for International Economic Exchanges, said.

According to Zhou Xiaochuan, former PBC Governor, the decline in the deposit savings rate shows the rise in domestic demand. Along with the development of consumer finance, the younger generation tends to consume more in advance, which can bring about key economic and cultural changes.

A screen shows the total turnover of Tmall, Alibaba's online marketplace, during the Double 11 shopping festival on November 11, 2018 (XINHUA)

Buy now, pay later

China's rapid economic development in recent decades and its shift from a manufacturing-oriented society to a consumption-based one are providing more goods for consumers. Meanwhile, rising living standards have expanded people's needs beyond daily necessities, helping to boost consumption.

China's per-capita disposable income grew 6.5 percent year on year to 15,294 yuan ($2,237) in the first half of 2019, among which property income accounted for 8.6 percent, according to data from the National Bureau of Statistics. Nationwide retail sales of consumer goods totaled 19.5 trillion yuan ($2.7 trillion) in the same period, an increase of 8.4 percent from a year earlier.

Yang Jun, a professor at the Beijing-based University of International Business and Economics, said the purchasing power of Chinese people has increased due to enhanced social security coverage, a lighter tax burden and stable employment.

"People mainly delay consumption to save money for emergencies and gain more profit, but modern financial services allow them to cope with unexpected expenditures more easily," he said.

Although many of the older generation still uphold a frugal lifestyle and tend to save money as much as possible, the younger generation, pursuing a higher-quality lifestyle, favors consuming first and paying later.

People born in the 1990s are growing up in relatively good living conditions. As they become the primary drivers of social consumption, it is natural that they tend to consume ahead of time more, Wang said.

Another factor driving the trend of buying first and paying later is the expansion of online credit services as cashless consumption prevails in China. For young consumers, credit cards and other online credit products have allowed them to buy what they want with less consideration of the price.

According to a report on China's consumer credit market in 2018 released by the Academic Center for China's Economic Practice and Thinking at Tsinghua University, people between 30 and 39, and 40 and 49 accounted for 30 percent and 33 percent of borrowers, respectively, with people over 50 representing 1 percent. Meanwhile, people between 18 and 29 constituted 36 percent of the borrowers of consumer finance.

Huabei is a popular service among the younger generation like Qu. JD.com, China's second largest e-commerce platform, has also launched its virtual credit card service Baitiao, allowing consumers to buy products on its app and website now and pay later in installments with interest.

A report released by Huabei last year showed that 45 million out of the total 170 million people belonging to the post-1990s generation in China had used the service.

"I am now used to paying through credit payment services such as Huabei and Baitiao because I can pay in installments. It allows me to spend ahead of time while keeping some salary for daily use," Qu said.

With an increasing number of users, consumer finance has become a sector with great potential. "Relevant authorities have adjusted regulations on the consumer finance business, which has bright prospects," said Li Daokui, an economist at Tsinghua University, at a recent forum.

More prudent

Credit payment services have indeed improved the life of people like Qu who cannot afford certain products in the short term, while some outlandish consumers have gone too far. With low disposable income, many irrational consumers are struggling with accumulated debt from overspending.

According to Wang, an abundance of credit cards promoted by banks and booming financial technology have led many individuals to spend ahead of time, which generates risks as some tend to default.

"Consumers need to consider their disposable income when they use credit payment services. Meanwhile, financial regulation systems need to be upgraded to fend off risks," Yang suggested.

Although young people are often viewed as a group of bold consumers, they are also managing to striking a balance between saving and consumption. A survey released by Alipay earlier this year showed that the post-1990s generation is more conscientious about personal wealth management through online financial services than their parents.

The respondents born between 1990 and 1999 began to manage their money at 23 on average, about 10 years earlier than their parents, the report said.

The survey also found that young Alipay users tend to use its online monetary fund Yu'ebao more often for depositing money than the older generation.

For some of the post-1990s generation, putting eggs in different baskets can help improve their income and avoid rising debt. "I often buy expensive things through credit payment services and put aside part of my salary to pay off the debt. For the rest of my money, I mainly choose to invest it in financial products for more profit," Zhou Qi, a staff member at a Beijing-based state-owned enterprise, earning a monthly salary of about 8,000 yuan ($1,124), told Beijing Review.

According to Zhou, who started her job in 2016, she has saved nearly 150,000 yuan ($21,070) through making rational consumption and investment choices. To avoid overspending, she has set a monthly limit of 4,000 yuan to cover all her expenses and put a fixed amount of money in Yu'ebao to improve her assets.

Zhou used to care little about personal wealth management, but she became more aware of the necessity of saving money for emergencies after spending a large amount on medical expenses last year. Now she has changed her consumption style and made more plans for the future to reduce her reliance on her parents, with the goal of buying a car on her own in the future.

"Living simply and saving money do not mean being a miser, it means spending more rationally. Compared to the happiness from expensive but often impractical products, I find now that the steadily improving assets in my accounts make me happier," she said.

Copyedited by Rebeca Toledo

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