China's spenders are saving, and that's a problem.

Forty years after China began its near-miraculous run as the world's most powerful economic growth engine, its people are experiencing something new and unsettling: A feeling that the best times may be behind them. The Chinese economy is slowing, and the cost of living is rising. The trade war with the United States shows no sign of ending. Wage growth is sluggish. More young people are chasing fewer job prospects. Chinese consumers, who have become more cautious over the past year, are now staging a broad retreat.

They are buying fewer cars, smartphones and appliances. They are going to the movies less and taking fewer trips abroad. They would rather stick their money in the bank...