Three years ago, everything seemed to be going right for Blake Xu.

The 33-year-old entrepreneur and his family had built a portfolio of properties during China’s real-estate boom. His wife was expecting their first child. He had just sold an apartment, and put almost half of the proceeds into the stock market.

Since then, the property market has entered a years long downturn, the country’s benchmark CSI 300 stock index has lost around a third of its value and the economy has become increasingly vulnerable, suffering from moribund consumer confidence, weak private-sector investment and sky-high youth unemployment.

Xu has already pulled almost all of his money out of China’s stock market. His next exit may be from China itself. undefined undefined “I don’t know where the future path lies,” said Xu, who lives in Shanghai. “Once our child grows a little older, we intend to send him abroad, and perhaps we will also go.” undefined undefined For most of their lives, China’s new generation of middle-class citizens could take a booming economy for granted. But the property rout, the stock-market slump and the wider economic downturn have forced them to confront a difficult question: Are China’s boom years over for good?

Chinese citizens are spending less, saving more and shying away from risky investments. Household savings in the country reached $19.83 trillion by February, the highest figure on record, according to data from the central bank. Consumer confidence is near its lowest level in decades.

The increasing sense of nervousness among China’s city-dwellers and white-collar workers could be a major problem for Beijing. China’s government has for years derived legitimacy from its reputation for sound economic management. undefined undefined Now, that reputation looks increasingly shaky.

Finding an exit strategy

Hugo Chen, 30, was born during the early stages of China’s remarkable economic transformation, which came after former leader Deng Xiaoping  rolled back the worst excesses of Maoism and opened the doors to global trade.

Chen, who was raised in the wealthy coastal city of Shenzhen, studied for a master’s degree in the U.K. He moved back to China in 2017 to work in finance and, like many Chinese citizens, decided to play the stock market. He also bought bonds and invested in insurance products.

But last year, he made a decision: no more Chinese shares.

Chen, a banker, had previously helped an insurance company manage its money. He knew more than most about investing—and China no longer seemed like a smart place to invest money.

By the end of 2023, the CSI 300 index had fallen for three years in a row. Even worse, stocks in the U.S., Japan and elsewhere had surged. It was  supposed to be China’s century , but the economy and the stock market were losing ground to those in other countries.

“Becoming poor is one thing. Becoming poor while others get rich is another,” said Chen.

He shifted most of his investments into funds that buy U.S. stocks.

China has more than 220 million individual investors, meaning stock-market moves can have a big impact on the national psyche. These small investors once had a reputation as gamblers. After the slump of the past few years, they have scaled back their bets and  increasingly shifted to safer assets  such as money-market funds.

The real-estate sector has done even more damage to confidence. What started as an attempt by Beijing to rein in excessive debt in the sector around three years ago has morphed into a multiyear crisis, pushing dozens of developers to the brink of collapse and pulling the rug out from under one of China’s main drivers of economic growth.

The price of existing homes in China’s most developed cities fell 6.3% in February compared with the same month last year— the biggest year-over-year decline on record.

Xu, the entrepreneur, sold a second property in a process he described as extremely painful. But he has no regrets: The money will give him the flexibility he needs to leave the country if things get worse, he said.

“Emotionally, I hope for the best for this country,” said Xu. “However, if this team of leaders stays, to be frank, I have to have an exit strategy, as the outlook is worrisome.”

That is precisely the kind of sentiment that will unsettle officials in Beijing. Although China’s government keeps a tight grip on power, it is acutely sensitive to the public mood.

China’s population has a history of public displays of dissent,  including public protests against banks and companies . Beijing has tolerated at least a degree of dissent, as long as its citizens follow one overriding principle: Don’t blame the central government.

But some people in the country do blame Beijing for the current economic troubles, pointing to policy U-turns on internet companies, private education and real estate, and a strict approach to containing Covid-19 that has dealt lasting damage to confidence in the country.

The shift toward low investment and high savings is fuelling a vicious cycle, where the economic slump erodes confidence levels and, in turn, low confidence worsens the downturn, said Yasheng Huang, professor of global economics and management with MIT Sloan School of Management and a fellow at the Wilson Center.

“When a society settles on a particular psychology, it’s not easy to shift,” he said.

From hope to fear

Scarlett Hu, 37, remembers how it felt to be back in China in 2014. She had just returned from studying abroad, and took a job in Shanghai’s luxury-goods sector.

“At that time everyone in the society was full of hope. There was this promising sentiment around,” said Hu. “When we went out to relax after work, we believed that tomorrow would be better and let’s have fun today.”

Hu bought an apartment in Shanghai in 2017 and started buying mutual funds that invest in the stock market in 2020, before the birth of her son. She hoped the money would help pay for his education. At the time, it seemed like a smart bet: The real-estate market was booming, and stocks were nearing a record high,  cheered on by China’s bullish state media.
Her apartment has now lost 15% of its value, and her mutual-fund portfolio is down 35%.

“Now we talk about concrete plans and measures to secure a more certain future, focusing on ways to enhance our sense of security. You don’t feel that kind of ambition any more,” she said.

China’s government has taken steps to tackle the downturn, including easing lending rules for battered real-estate firms, cutting borrowing rates and pledging to resolve the debt problems of local governments. But Beijing appears reluctant to adopt the sort of direct stimulus Western governments embraced in the wake of Covid-19, when  direct payments to consumers  helped get spending back on track.

In early March, Chinese Premier Li Qiang said the government was targeting growth of around 5% for 2024, and there have been recent signs of improvement.

But economists think Beijing will find it difficult to hit this growth target, and some people in the country worry that things are about to get worse.

A 40-year-old equity analyst based in Beijing said she lost her job last August when the consulting firm she worked for closed. She has two children to care for, her husband’s income is unstable, and she is bracing herself for more pain to come.

“Everyone is saying that this year might still be the best in the next decade, so we should be prepared for a long period of hardship,” she said.

The ESG brand probably has its best days behind it.

Following a three-year craze for investment products focused on environmental, social and corporate-governance concerns, the percentage of newly created funds in the U.S. and Europe with ESG in their name has fallen from a peak of 8.3% to just 3.3%, according to an analysis of quarterly data by Morningstar Direct.

Likewise, online searches for “ESG investing” have plummeted back to mid-2019 levels, according to Google Trends. Mentions of the term in company analyst calls have dropped 59% from their quarterly peak in 2022, FactSet data suggest.

One explanation is the collapse of the clean-energy stocks most readily associated with the ESG movement. Flagging growth in electric-vehicle sales has hit sector behemoth Tesla . The S&P Global Clean Energy index, which lists solar-panel maker First Solar and Danish wind-turbine giant Vestas among its top constituents, has lost 31% since the start of 2023 as renewable-energy projects have been shelved. That compares with returns of 27% for global stocks.

The rise of ESG investing between 2019 and 2022 coincided with a surge in clean-tech valuations, and now the reverse is happening. Investors have pulled $2.2 billion from funds dedicated to decarbonisation since the start of the year, according to EPFR, and the outflows are getting larger every week.

There is a risk that ESG was an investment fad rather than a financial revolution extending across all industries.

The term was the product of an uneasy three-way alliance. On one side were ethically driven investors, who are particularly widespread in Scandinavia and include pension funds, universities and religious organisations united in wanting to shun contentious firms. On another were institutions such as the United Nations that aimed to channel money to industries that benefit society. Finally, there were investors who wanted to profit from the green revolution.

Asset managers jumped at the chance to cater to all three simultaneously. ESG allowed them to differentiate their products, revitalise the case for active management and, at a time of declining fees, charge more for stock screens that often lead to only small changes in allocations . Among U.S. equity funds, ESG strategies have an asset-weighted average fee of 0.52%, compared with 0.33% overall, Morningstar Direct data shows.

But the confusion of motivations made for contradictions and a lot of doublespeak. Neither ethical objectives nor bets on decarbonisation square logically with fund managers’ claims that ESG is a broad path to higher, safer returns.

Yes, an ESG focus can help active managers account for risks such as a regulatory backlash or governance blow up, which in some cases might be highlighted by new company disclosures. This month the European Union cleared the way toward requiring firms to better report and address sustainability impacts.

However, the assumption that integrating ESG criteria into their screening will lead to better stock picking seems flawed . The very popularity of ESG makes it unlikely that the market is under appreciating the risks. The rush of money into firms like Vestas, whose stock hit a price-to-earnings ratio of 534 in 2022, illustrates the risk that shares with high sustainability scores can get too expensive, leading to lower returns.

Ethical investors might be fine with this, but that just shifts the focus to what counts as ethical. Tellingly, interest in ESG has dropped more in the U.S., where the politicisation of EVs and culture wars surrounding Bud Light beer show how easily corporations can become ideological battlegrounds.

ESG ratings aren’t much help in navigating these issues. Different providers give wildly different scores to the same companies, even within the specific “E,” “S” and “G” factors, according to a February paper by the Leibniz Institute SAFE. Researchers also found that environmental concerns tend to explain most of the overall score.

This is another hint that the ultimate driver of the pandemic-era ESG craze might have been a hunger for thematic investment. It has since found better sources of sustenance, as demonstrated by the breakneck growth of firms such as Global X, which is delivering increasingly granular offerings such as tracker funds for electric batteries, cloud computing and ageing populations.

Buyers of these products can be fickle and jump to the next theme—often too quickly for their own good, a Morningstar analysis showed last November. It is possible that the overly generic ESG brand will never recover its appeal, with the different parts of it eventually rebranded to suit their specific client bases. BlackRock , the world’s largest asset manager, has already dropped it and is now emphasising transition themes over ethical stewardship of companies.

Sustainable investing isn’t going anywhere. But a broad tent covering too many interests serves none of them well.

When a Swedish startup launched a new material made from recycled textiles in late 2022, the fashion industry hailed it as a game changer in its efforts to lessen its environmental impact.

Last month, the company, Renewcell, filed for bankruptcy. While some big retailers, including H&M and Zara, were enthusiastic backers, not enough brands committed to buying its material. Having misjudged how quickly the fashion industry would switch to more sustainable sourcing, the company was left with a costly factory running far below capacity.

The plight of Renewcell illustrates the fashion industry’s hesitancy in adopting new materials that may be better for the environment but typically cost more, at least in the short term. It is also another sign of how some companies are putting less emphasis on green initiatives amid a more challenging economic climate.

“There’s a disconnect” between some companies’ stated sustainability ambitions and what they actually do, said Tricia Carey , Renewcell’s chief commercial officer. “Fashion brands have the intention,” Carey said, “but many are lacking the road map to make it happen.”

Making clothes uses a large and growing amount of the planet’s resources. More than 100 billion garments are produced annually and that number is set to rise by one-third by 2030, according to the Ellen MacArthur Foundation, a nonprofit. It says the average garment is worn only 10 times before being discarded, often ending up in the trash . The fashion industry is responsible for as much as 8% of global greenhouse-gas emissions, according to the United Nations Alliance for Sustainable Fashion.

Fashion brands have come under growing pressure from consumers and regulators to reduce their environmental impact, posing a dilemma for an industry hardwired to keep increasing sales by churning out more clothes.

To burnish their green credentials, brands have encouraged consumers to repair, recycle or sell old clothes rather than throw them away. They have also invested in so-called next-generation materials that promise to use fewer resources and, in some cases, have the potential to be recycled again and again.

Inditex , the parent company of Zara, says it wants a quarter of the fiber it uses to be made from next-generation materials by 2030. To foster new materials, the company has worked with more than 300 startups, also including Renewcell, through a Sustainability Innovation Hub that it set up four years ago.

H&M says it wants recycled fibers to constitute half of the material it uses by 2030. The company has invested in more than 25 sustainability startups, including Renewcell.

So far, the uptake of greener material has been sluggish. Recycled materials made up 7.9% of global fibre production in 2022, down from 8.5% the year before, according to the Textile Exchange, a nonprofit that advocates the adoption of more environmentally friendly materials. Much of that came from recycled plastic bottles, with less than 1% of all fibre coming from recycled textiles.

That’s despite next-generation materials attracting more than $3 billion of investment over the past decade, according to the Material Innovation Initiative, with dozens of new-textile companies launched during that time.

Founded in 2012, Renewcell became the first chemical textile-to-textile recycler to start producing material on a commercial scale.

Its material is called Circulose, which is produced by treating old textiles with chemicals to create a cellulose pulp. This is dried into sheets, which fibre producers can then dissolve to produce viscose and other materials that are used to make clothes. Unlike mechanically recycled fibres, which fray and ultimately disintegrate, Renewcell’s chemical process breaks old textiles down to the level of individual molecules from which strong, new fibres are made. These can be recycled indefinitely via the same process.

With many fashion companies pledging to invest in new textiles to be more sustainable, Renewcell bet on strong demand for its material.

The company raised $158 million, mostly through a 2020 listing in Stockholm, and invested $125 million to convert an old paper mill in eastern Sweden into a Circulose factory capable of producing 60,000 metric tons a year.

Renewcell also outlined plans for two additional factories that would increase its output sixfold by 2030.

Besides Inditex and H&M, Calvin Klein and Tommy Hilfiger owner PVH committed to buying significant quantities of fiber made from Circulose.

But Renewcell hit a brick wall in talks with other big brands. In meetings, brand executives would often express excitement and agree to pilot projects, only to balk at placing commercial-scale orders, said Carey.

Jolts to the economy, such as Russia’s invasion of Ukraine, and shaky consumer confidence had made brands risk averse.

Would-be customers fixated on how fiber made from Circulose cost 20% to 45% more than the virgin fibers they typically bought, as well as uncertainty about integrating a new material into their supply chains, Carey said. Fiber typically accounts for about 5% of the retail price of a finished garment.

Renewcell needed its factory to reach full output quickly to become commercially viable, but it achieved only 30% capacity last year as anticipated orders failed to materialize.

By October, the company was running out of cash, and in January it laid off a quarter of its 130 staff. It filed for bankruptcy in February after failing to secure fresh investment.

Renewcell is now seeking a buyer to repay its debts and restart production.

The company’s predicament is a grim sign for a clothing industry that claims to want to transform itself, said Claire Bergkamp, managing director of the Textile Exchange.

“My hope is this will be a wake-up call for the industry,” she said.

Unless fashion companies commit to paying higher prices for new, greener materials, other fiber startups could also struggle, Bergkamp added.

While the transition from gasoline cars to electric vehicles has benefited from billions of dollars in subsidies, the move to new textiles has received practically no government support, making startups reliant on private funding.

That has left some big clothing companies, notably H&M and Inditex, shouldering a relatively large share of the burden of supporting new-material startups.

H&M invested in Renewcell in 2017 and was the first retailer to launch products containing Circulose. It currently sells around three dozen products containing the material.

The retailer wanted to invest more but decided not to commit more cash in recent weeks because of the lack of support from other companies, said H&M Chief Executive Daniel Ervér .

Earlier this month, H&M announced a new investment in Syre, a startup developing a polyester-fabric recycling process, and pledged to buy $600 million worth of its material over seven years—assuming it achieves commercial production.

Demand for recycled polyester is already established, with material made from recycled bottles already commonly used to make clothes. But textile-to-textile recycled polyester is similar to Circulose in that the technology is untested at scale.

To drive a shift to next-generation materials, other companies need to invest and commit to buying new textiles at scale, Ervér said.

“H&M alone cannot provide the scale that is required,” Ervér said. “The industry needs to commit.”

The risk of running out of money in retirement rises for those with lower pay, longer lives or no partner.

Millions of single women wrestle with all three.

Women earn less than men on average during their working years and are more than twice as likely as men to leave the workforce for more than one year to care for children or ageing parents , according to a survey of 5,261 Americans that Goldman Sachs plans to release Monday.

This shortfall compounds in retirement. Social Security checks are 20% smaller for women who first claim at 62 to 64 years of age, compared with men the same age.

Single women, in particular, have smaller 401(k) and IRA nest eggs . On average, single women between 55 and 64 have about $88,600 in retirement savings, compared with $136,685 for single men and $423,800 for married couples in the same age group, according to Boston College’s Center for Retirement Research.

Women also tend to live longer , raising the projected total cost of retirement as they have to stretch their smaller savings over more years.

Despite these financial obstacles, single women find ways to pursue new ambitions in retirement, including launching businesses and traveling the world. They could have more time if their caregiving responsibilities have ended. With more freedom than many of their married counterparts, some women can make big changes without needing to compromise or negotiate.

We spoke in depth with four single women who have retired. Some have sizeable nest eggs, while others rely on Social Security benefits or earnings from part-time gigs. Each has found fulfilling ways to define retirement for herself.

Deb Hallisey saved diligently during her career as a consultant, and sought help from a financial adviser.

As a single woman, the Lawrenceville, N.J., resident said, “I knew it was going to be on me to provide for myself.”

All that planning was thrown off track after her father died in 2015. She had to put her work with clients on hold to help her mother—who was blind—find live-in help. When her billable hours dropped that year, she lost her job.

Hallisey, 66, sent résumés to consulting contacts, but she was tired of traveling and craved a new challenge.

She found it in becoming a caregiver for her mother, who died in 2022. In addition to handling her mother’s finances and medical appointments, Hallisey spent half of her weekends at her mother’s house to give her mom’s paid caregiver time off.

Angry and resentful, Hallisey quickly realised something had to change.

“When I was angry, my attitude gave Mom an attitude, and we’d start the weekend off wrong. There is a moment when you say, ‘I can’t keep doing that,’ ” she said.

Her mother urged her to write about her caregiving experiences, something Hallisey threw herself into in 2016, after meeting a successful blogger.

She soon launched a website, Advocate for Mom and Dad, and has written two books about caregiving. She speaks frequently on the topic and does consulting for families.

Hallisey saved $600,000 for retirement and built a $50,000 emergency account she used after the layoff. She currently takes $2,500 a month from her retirement savings and earns $500 a month from her business.

Thanks to the strong stock market, her balance is $525,000. Her home is valued at about $500,000 and she has paid off her mortgage.

In June, Hallisey plans to claim Social Security and use her $3,400 monthly benefit for living expenses. Her goal is to leave her IRA for emergencies, including future caregiving expenses.

She recently hired a financial professional to serve as her power of attorney if she becomes unable to manage her finances. After having done that for her mother, she said, “I could not in good conscience ask a friend to do that for me.”

She spends about $2,200 a month, including $260 for home and car insurance and $250 for food. She sets aside $750 a month for property taxes.

She never expected to tap in to retirement savings early, but has no regrets.

“I’m not making enough to support myself,” said Hallisey, who plans to write another book. “But I love it.”

Marianne Simpson retired slowly.

She chose to wind down her financial advisory business over three years, using the transition to test drive retirement while continuing to build up her nest egg. All this still didn’t fully prepare her, she said, for the moment she put her longtime home up for sale and closed the deal on her new life.

She left the Cleveland area and her 25-year career behind and bought a new place in Chicago close to her daughter, son-in-law and two young grandchildren.

With $2 million in retirement savings and a $3,800 monthly Social Security check, she’s in much better shape than most retirees. She also knows better than most how one’s health and lifespan can largely dictate how long money lasts.

“My daughter tells me to spend more on myself, but my mother lived to 101 so I want to make sure I don’t run out of money,” Simpson said.

As a single adult, she said it is critical that she can manage any future healthcare challenges independently and not have to rely on friends or family.

She now spends about $11,000 a month, around half of which goes to setting aside reserves for large expenses such as taxes and insurance. Her big yearly expenses are about $10,000 for insurance including her long-term care and personal umbrella policies, $10,000 to charity and $15,000 in property taxes. Simpson spends roughly $12,000 a year on travel, including her recent two-week trip to Spain.

She volunteers in her church’s shelter for Venezuelan migrants, cooking dinners and doing laundry. She also volunteers several times a month at a local secondhand store where all of the receipts go to local charities.

“The volunteer work helps give me a new sense of purpose,” she said.

Simpson has met new friends, though socialising as a single woman isn’t always easy, she said.

“Much of the world still moves in couples,” she said.

Stephanie Perry retired at age 41.

Perry was inspired by the FIRE movement, which stands for Financial Independence, Retire Early. Those in it save aggressively and pare spending so they can leave work decades ahead of schedule.

“Retirement is the freedom to be anywhere in the world at any time,” she said.

When she told her parents she was quitting her pharmacy tech job to live the rest of her life traveling the world, they worried about her mental health. Eight years later, her parents see how happy she is and have come around to the idea, she said.

Perry does work, but no more than 10 to 20 hours a week on average. She earns money through house sitting, a YouTube channel, virtual coaching and co-hosting events for Black women. She only takes on projects she likes.

Early retirees often call this part-time approach “barista FIRE.”

Since her early retirement, she has saved more than $100,000 in a Vanguard IRA. She has no debt and all her various side hustles add up to a six-figure income, she said. Perry has traveled to more than 30 countries, including Australia, South Africa and Cambodia.

Now 49, Perry never pictured this life when she was in her 20s and 30s.

Perry said she was miserable working the overnight shift at the pharmacy. She revenge-shopped and ran up debt to temporarily soothe her spirit. The bank foreclosed on her house.

She began following YouTubers who were enjoying early retirement and an itinerant lifestyle. She wanted to retire, too.

She spends about $2,500 a month, on average, including travel medical insurance, her cellphone and food. She lives out of two suitcases and stores the rest of her belongings at her parents’ home in Delaware, where she visits three or four times a year.

Perry checks in with family and friends in the U.S. regularly through video calls. She goes on the occasional date, but has no plans to get married.

Perry never wants to own a home again and has no plans to live full time in the U.S. She’s working on a book for Black women about how they can leave their 9-to-5 jobs. She would like to settle down in Mexico or Costa Rica one day but hasn’t immediately made preparations for retiring from working entirely.

“I’m never going back to my old life,” she said.

Lori Renee Fye , 65, joined the U.S. Air Force after high school, serving in a mobile radar unit in Germany and at bases across the U.S.

She continued traveling after the military, working in administrative jobs for a conservative pundit in Washington, D.C., an apple baron in Texas, and the chairman of a Native American tribe in California. After her divorce in 2014, she sought refuge in European travel.

After her younger brother’s divorce in 2018, she returned to the Canton, Ohio, area where she grew up. She came to provide emotional support and never left.

“This is the place that made me, gave me my work ethic and basic values,” said Fye. “There is a thing called a sense of place. I’ve realised I’m back in my place.”

Canton is more diverse than she remembered. No one is shocked anymore at the sight of a woman riding a motorcycle, as Fye used to do, she said.

This fall, Fye began volunteering about 30 hours a week at a newly opened LGBTQ+ community centre, Queer in Canton. She gives tours and helps organise the cafe and a clothing donation closet.

Though she says she’s an introvert, Fye enjoys meeting new people, even a group of teens that gathers weekly at Queer in Canton.

“Young kids usually get on my nerves,” she said. But “seeing them hang out together is one of the greatest joys I get from the place. It gives them a place to go and be with other kids who are different and not be bullied.”

Fye, who earned about $70,000 at the peak of her career, lives on her Social Security check of $1,665, plus the $100 her former spouse sends her each month.

She wishes she had worked a little longer to boost her Social Security benefit.

She pays monthly rent of $500 to her brother, who owns the two-family home they share, bordering a woodsy area with a creek.

“I feel very secure here. He pays for the water and Wi-Fi. I pay for the trash collection and the bulk of the mortgage,” she said. “It’s nice to be with someone I can trust to be there for me. Everybody needs one person. My brother is my person in a lot of respects.”