While China’s aging demographics could hold back the economy over the long haul, the elderly increasingly stand out for their healthier finances and resilience, according to Gao Shanwen, chief economist at SDIC Securities, who’s previously advised the country’s regulators and top officials.

“The younger a province’s population is, the slower its consumption growth has been,” Gao said at an investor conference in Shenzhen on Tuesday, citing his analysis of regional data. In public remarks live-streamed on several platforms, he described China’s post-pandemic society as being “full of vibrant old people, lifeless young people and despairing middle-aged people.”

The unsparing remarks quickly drew attention on China’s social media including Weibo, where videos and transcripts of Gao’s speech have been trending. The candor was all the more unusual at a time when local analysts try to moderate their language or even censor certain words such as “deflation,” as officials call for creating a more positive narrative around the economy. 

Less than four years ago, the ruling Communist Party mouthpiece People’s Daily hailed young people as a spending force, saying they were “becoming the main consumer group of many popular products.”

Retail sales have been sluggish since the spread of Covid-19 worsened in 2022, as consumer confidence took a hit from pandemic measures as well as China’s worst property crisis in recent history. As the economy slowed, widespread salary cuts and layoffs also strained household budgets and curbed spending.

Although a recent government campaign to subsidize purchases of cars and home appliances led to a rebound in consumption, its growth is still far below pre-pandemic levels. 

Before the pandemic, there was no strong correlation between a region’s consumption growth and its demographic patterns, according to Gao. The shift in recent years reflects the fact that retirees’ pension payouts have remained stable, while young people’s job prospects have dimmed, he said.

“At least for young people, their confidence in future income has declined significantly, their spending activity has been curbed, and their willingness to buy homes has also been curbed,” he said. “But all of these problems don’t exist for the elderly population.”

Youth unemployment remained elevated at 17.1% in October, more than triple the nationwide jobless rate in urban areas. 

There may be a total of 47 million people who haven’t been able to find formal work in cities over the past three years even though the official jobless rate stayed stable, Gao said, citing his analysis of pre-pandemic trends in urban employment figures. That’s equivalent to 10% of China’s urban workforce last year, based on Bloomberg calculations using official statistics.

Those people might have made their way back to their home towns in the countryside or turned to gig work, meaning they aren’t counted in the official statistics, he said. Other independent analyses have also pointed to a weaker job market than shown in official data.

In another bold statement, Gao estimated that China’s gross domestic product may have been over-counted by 10 percentage points over the past three years, based on his analysis of the discrepancy between data on economic growth and the expansion in areas like consumption, investment and the labor force. 

A number of other economists have questioned the accuracy of official data for GDP growth in 2022 and 2023.