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The Impact of China’s ‘Lying Flat’ Movement on Labor Markets

Summary

The ‘lying flat’ movement that emphasizes a stand against traditional employment and a minimalist lifestyle is sweeping across China. The appeal of this lifestyle to many in the younger generations could prove an obstacle to Xi Jinping's dual circulation economic model, particularly amid China's aging population demographic.

What Is the ‘Lying Flat’ Movement?

China’s ability to innovate quickly, paired with its uniquely large consumer base, has propelled the nation to become the powerhouse it is today. However, the race to become self-reliant has come at a price to its most precious resource – its youth. A deeply ingrained culture of hard work to the point of burnout has run its course with some of China’s youth, and many have rebuked China’s working traditional work culture, choosing instead to live simply, cheaply, and stress-free. These youth have chosen to ‘lie flat.’

Lying flat, or tǎngpíng (躺平), is a blossoming movement that emphasizes living simply and only putting in the bare minimum, or “lying flat.” China’s disillusioned youth who subscribe to this lifestyle ideology are not chasing higher pay or a higher social status, rather are choosing to leave the ‘rat race’ behind. The movement has emerged over recent years due to the growing ranks of unfulfilled millennials exasperated with the pursuit of promotions, material goods, and unreasonable workloads. This movement has gained particular traction among younger professionals within China’s technology industry, where the prevailing “996” schedule expects employees to work from 9 a.m. – 9 p.m. for 6 days a week. 

What Does ‘Lying Flat’ Mean for China’s Economy?

The lying flat movement raises an interesting implication for the prospects of China’s long-term economic growth. This passive, care-free attitude towards work directly challenges China’s forward-looking ‘dual circulation’ strategy, which is a cornerstone of ‘Xiconomics’ that focuses on harnessing innovation and domestic consumption to bolster economic growth. The “dual circulation” initiative was first unveiled in early 2020 and segments the Chinese economy into domestic consumption, or “internal circulation,” and foreign consumption, or “external circulation.” In a push to shore up the influence of geopolitical risk on the domestic economy, President Xi Jinping has increasingly stressed the importance of self-reliance through internal circulation in order to reduce reliance on foreign markets and supply chains. He also highlights an empowered consumer base that supports the consumption of domestically produced goods. Regarding external circulation, the strategy emphasizes the importance of fostering inbound foreign investment to reduce the reliance on trade in a historically export-driven economy. The key tenets of the dual circulation strategy were featured in China’s 14th five-year plan.

For the dual circulation strategy to be successful, China will need its youth to actively participate in the labor force and consume at high rates. This is a consumer group with massive purchasing power that has the potential to influence national economic growth. However, this is challenged by the lying flat movement, which rallies behind the tenets: “Don’t buy property; don’t buy a car; don’t get married; don’t have children; and don’t consume.” According to Wang Xingyu of the China University of Labor Relations, this anti-consumption attitude towards living only compounds challenges the nation faces, as “The goal of high-quality development is inseparable from the creative contributions of young people.” Wang further states, “Personal struggle and economic development are complementary to each other. The country’s policies and measures to encourage innovation and entrepreneurship and cultivate new economic growth points are an important way to promote economic transformation and high-quality development.”

Yet, as a growing number of China’s youth push back against China’s labor expectations, the loss of productivity will curb China’s competitive edge across many of China’s most sensitive sectors – including retail and tech – which have historically been notorious for promoting the intensive 996 work schedule.

Average Workplace Hours in the US and China

Sources: CEIC, Statista, The China Guys

China’s Labor Market: A Summary

Over the course of the pandemic, China’s unemployment rate had seen relative volatility after rising to a high of 6.2% in February 2020. China’s younger population and early-age workforce bore the brunt of this dip as Chinese youth saw unemployment rates pushing the high teens. It is important to note that Chinese policymakers also amended the definition of “unemployment” in its calculations and classified previously unrepresented professions as fulfilling the requirement for employment, such as gamers, bloggers, livestreamers, and e-commerce shop operators. This was amid unofficial surveys in July 2020 showing that only a quarter of the then-recent 8.7 million college graduates receiving a job offer by the end of May 2020.

China’s Gen-Z Unemployment Rates in the Pandemic

Sources: Statista, The China Guys

Many young millennials and Gen-Z labor participants are not as zealous as older generations to join the workforce. Unemployment among the 16-24 year old age group was a whopping 16.2% in July 2021, which was a near 1% increase from 15.4% in June 2021 and several points higher than the 12.3% in December 2020. In addition, a shortage of suitable jobs for China’s newly-minted graduates could keep youth unemployment rates in the double digits. Students are stuck in constant competition with one another for the same jobs, and those that are choosing to lay flat are most often looking towards non-traditional forms of employment – like the gig economy – to pay the bills.

In addition, amid its growing aging population, China’s labor participation rate has been in steady decline. This metric is an important tool used to measure the number of working-age people actively working or searching for jobs. China’s figures appear to show an imbalance between skilled workers, available jobs, and formal employment interest – particularly among the younger workforce.

China’s Declining Labor Participation

Sources: CEIC, The China Guys

‘Lying Flat’ in the Bigger Picture

Manufacturing Production Force

China’s workforce appears to becoming over-educated for many jobs in the market. According to Shuang Ding, an economist at Standard Chartered Bank, “Young people are no longer willing to take up just any type of hard jobs. They have much higher expectations for what a job can bring, and they can afford to wait longer.” Many students continue straight onto graduate school, which has led to a phenomenon in which graduates with undergraduate degrees face scrutiny when attempting to find employment and thereby face incredible barriers to entry when seeking entry-level employment. In 2020, 54.4% of students within their own age cohort went onto receive tertiary education.

The manufacturing sector is particularly in relation to highly-educated, formal employment-averse millennials and Gen-Zers; the industry is labor intensive, relatively low-paid, and largely unskilled related to the troves of graduate students seeking employment. Nonetheless, the industry is poignantly essential to China’s dual circulation strategy, which emphasizes Chinese manufacturing capabilities. As a result, manufacturing wages have risen, production margins have shrunk, and firms have been increasingly turning to robotics in order to upgrade manufacturing facilities.

Aging Population

Many industries exposed to the lying flat movement will also see their pains compounded by an aging population. Chinese policymakers are confronting one of the world’s most stark aging populations amid China’s disenchanted youths’ hesitancy to start a family. The average worker’s age has increased from 28 to 35 in China. The average age of China’s migrant workers, a significant portion of China’s workforce, was at least 41 years old in 2020, while the amount of migrant workers aged 30 and younger has decreased from 46% in 2008 to 23% in 2020.

By 2040, 25% of China’s adult population will be over 64-years-old. In turn, China could see a resulting 10% drop in its workforce and a 50% increase in dependent retirees. This demographic will depend heavily on the resources that China’s workforce produces. The aging population will have a direct impact on China’s labor force, and will only be exacerbated by labor movements like ‘lying flat’ which shrink the younger band within the labor pool.

Looking Ahead

The future for China’s youth in the labor force may still be uncertain; however, businesses can help re-instill confidence by establishing better working conditions, richer work cultures, and offer stronger worker protections. Labor is a tremendous resource, and China will have to manage labor-related obstacles like the lying flat movement and an aging population to efficiently meet its long-term economic goals. 

In this vein, Chinese policymakers have recently declared it illegal to impose a 996 work schedule; in fact, China’s top court detailed 10 court decisions related to overworking in a joint statement. Though many tech entrepreneurs, like Jack Ma himself, have notoriously supported the 996 work culture, it is apparent that policymakers have taken a longer-term view of the issue and are willing to sacrifice short-term productivity for long-term workforce stability. Should Beijing be successful, many of China’s youth may be inspired to “stand up” and join the labor force.

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