Retiring on 300,000 RMB: China’s youth flee big cities for smaller towns
Amid uncertainty in China’s economic outlook and job market, the American concept of “Financial Independence, Retire Early” has trended among Chinese youth. Lianhe Zaobao correspondent Li Kang finds out that people are motivated not just by the goal of early retirement, but also by regaining control of their time and life.
As the new year begins, Sansan, a 30-year-old Chinese youth who retired early, revealed his living expenses from the past year.
His basic costs totalled just over 30,000 RMB (around US$4,360), which was more than covered by his passive income of nearly 35,000 RMB. Three years after quitting his job and retiring with 1 million RMB in savings, his nest egg remains intact and has even grown to 1.07 million RMB, allowing him to truly live the FIRE lifestyle.
FIRE popular among Chinese youths
FIRE (Financial Independence, Retire Early) is a concept that emerged over a decade ago within American personal finance communities. It advocates achieving financial independence and retiring early — often around the age of 30 — through aggressive savings, disciplined spending and prudent investing.
However, surveys show that among affluent middle-aged and older Americans, only 11% have heard of the concept. Those who have actually managed to retire early are rarer: just 1% among people in their 40s, and a mere 6% among those in their 50s.
However, after FIRE came to China, it rapidly gained traction among young people. Early adopters like Sansan are already living an enviable retired life.
Sansan currently lives in Daya Bay, Huizhou. He rents a fully furnished three-bedroom apartment for just 1,000 RMB a month...
On the Chinese social networking platform Douban, the “FIRE Life” group formed in 2020 now has more than 240,000 members. As discussions have shifted from theory to practice, several notable subgroups have emerged within the community. For instance, the 90,000-member “FIRE Life (Budget Version)” group targets young people aiming to work for ten years and retire with savings of 300,000 RMB. Meanwhile, the “Neither Poor Nor Rich FIRE” group limits participation to those with an annual after-tax income of no more than 300,000 RMB. Depending on the form early retirement takes, various offshoots have also emerged, including part-time FIRE, barista FIRE, parenting FIRE and hermit FIRE.
Small minority truly able to pursue FIRE
The idea of early retirement has continued to gain traction in China, with a wide range of practices flourishing. A key reason is the country’s vast size and the stark differences in living costs across regions. The high incomes of first-tier cities, combined with the lower expenses in third- and fourth-tier cities, provide young FIRE followers with room to experiment and adjust their plans.
Sansan currently lives in Daya Bay, Huizhou. He rents a fully furnished three-bedroom apartment for just 1,000 RMB a month (with a flatmate covering 500 RMB). Once this largest expense — rent — is taken care of, the cost of retirement drops significantly. Last year, his spending on essentials such as rent, utilities, gas and property management fees amounted to just over 10,000 RMB, accounting for only one third of his total basic living expenses for the year.
Furthermore, amid the economic downturn of recent years, as well as shrinking job opportunities and rising retrenchment risks, young people’s mindsets have been quietly shifting. Where once they strove relentlessly to climb the career ladder and push themselves to the limit, many now place greater emphasis on living on their own terms. This shift echoes earlier trends such as adopting “Buddha’s ways” (佛系), “lying flat”, moving into temples, or relocating to youth retirement homes.
Looking at Sansan’s passive income last year, 17,000 RMB came from fixed deposits, 7,800 RMB from flexible financial products, 9,300 RMB from the stock market, and 8,700 RMB from tax refunds and life insurance returns.
However, unlike a passive withdrawal, early retirement entails a planned and proactive exit, and it comes with a clear and very real financial threshold. Based on last year’s national per capita disposable income of 43,377 RMB in China, even saving 300,000 RMB would take seven years if one spent nothing at all — let alone the 23 years required to accumulate 1 million RMB.
Once everyday expenses are factored in, the difficulty of saving only increases. According to the annual report on China household income distribution released in December 2023, 600 million people in China earn less than 1,090 RMB per month, while as many as 964 million have a monthly income below 2,000 RMB. Such an income structure determines that only a very small minority are truly able to accumulate sufficient capital for retirement.
Even with the principal at hand, generating a stable cash flow through asset allocation and financial planning present an additional challenge in today’s low-interest environment, where fixed deposit interest rates have fallen below 1%.
Looking at Sansan’s passive income last year, 17,000 RMB came from fixed deposits, 7,800 RMB from flexible financial products, 9,300 RMB from the stock market, and 8,700 RMB from tax refunds and life insurance returns. This kind of portfolio requires financial knowledge, risk tolerance and the self-discipline to control living costs over the long term — not something everyone can do.
Regaining control over one’s life
Regardless, an increasing number of Chinese youths are treating FIRE as a realistic option. Perhaps the true aim of launching retirement plans with just 300,000 RMB is not merely to enjoy life early, but to regain control over their time after years of enduring high-pressure work.
For some, early retirement may not be sustainable, and they may have to return to the workforce after their cash runs dry. For others, early retirement does not necessarily mean never working again; it may simply be hitting the pause button, stepping off the conventional path of study, work and retirement, and exploring another possibility in life.
When more young people in China embrace and sustain a low-cost lifestyle, this could signal slower economic growth.
In the current economic downturn, such a choice may well be a form of retreat. When the tide rises again, they may return to the workplace after a period of rest and readjustment. Even if they never go back to their original path, they would have at least secured a period of time that truly belonged to them.
China’s rapid growth over the past few decades has largely been built on generations who worked tirelessly and gave their all. When more young people in China embrace and sustain a low-cost lifestyle, this could signal slower economic growth.
Yet from another perspective, if economic development is ultimately meant to improve people’s lives, then the choices Chinese youths are making today might also be seen as a return to first principles.
This article was first published in Lianhe Zaobao as “美国FIRE点燃中国青年”.
![[Video] George Yeo: America’s deep pain — and why China won’t colonise](https://cassette.sphdigital.com.sg/image/thinkchina/15083e45d96c12390bdea6af2daf19fd9fcd875aa44a0f92796f34e3dad561cc)
