The Economics of “Lying Flat”: China’s Youth Opt-Out

Ted Yip

In early 2021, an online post titled "Lying Flat Is Justice"[1] ignited a fierce debate in China.[2] The philosophy of "lying flat" - a rejection of societal pressures to constantly strive for success - gained traction among Chinese youth, raising alarm bells for policymakers and economists alike.[3] State media quickly criticised the idea, with the Southern Daily publishing an article condemning "lying flat" as shameful and unjust.[4] The piece, later republished by Xinhua News Agency, branded the philosophy as harmful "poisonous chicken soup"[5], a phrase used to describe the promotion of decadence under the façade of motivational quotes.[6]

An illustration of four cats “lying flat.”[7]

At its core, "lying flat" advocates minimalism: forgoing home ownership, avoiding relationships, and embracing bare-minimum consumption.[8] From an economic perspective, this trend has far-reaching implications beyond mere personal choices.

The macroeconomic impact of "lying flat" is most immediately visible in aggregate demand (AD). As young people reduce their consumption, the overall consumption expenditure (C), a key component of AD, decreases. The decrease in C prompts a decline in AD, typically leading to lower price levels and decreased real GDP in the short run.

However, the long-term consequences are potentially more severe. The reduced consumption can ripple through the economy: as youth spend less, businesses earn less revenue, potentially leading to reduced investment and employment, further depressing economic activity. Moreover, the philosophy's advocacy for not having children could exacerbate China's demographic challenges, as a shrinking workforce would lower the long-run aggregate supply (LRAS). This could result in a perfect storm of economic woes: lower potential output, increased inflationary pressures, higher dependency ratios straining pension and healthcare systems, and constrained economic growth potential owing to declining labour force participation.

Viewed through the lens of behavioural economics, "lying flat" might be interpreted as a rational response to perceived limited upward mobility. Concepts like loss aversion might explain why youth, facing daunting house prices and intense competition, opt out of the rat race altogether.

The phenomenon also raises questions about productivity and human capital investment. For individuals, the opportunity cost of "lying flat" is substantial: foregone earnings, skill development, and potential life experiences. For the broader economy, it represents a loss of human capital and innovation potential crucial for navigating the middle-income trap. As young people disengage from career advancement and skill acquisition, labour productivity could stagnate, further dampening long-term economic growth prospects.

Income inequality, often measured by the Gini coefficient, plays a crucial role in this scenario. High inequality can reduce social mobility, fostering the disillusionment that fuels the "lying flat" mentality. This creates a vicious cycle: inequality breeds disengagement, which may further exacerbate inequality as some opt out of economic participation.

Policymakers face a complex challenge. Simply admonishing youth or appealing to patriotic duty is unlikely to reverse the trend. Instead, addressing root causes, including housing affordability, rat race culture, and income inequality, may be necessary. Policies that enhance social mobility and distribute the fruits of economic growth more equitably could help re-engage disillusioned youth.

The "lying flat" phenomenon serves as a stark reminder that economic policies cannot be divorced from social realities. As China seeks to maintain its economic dynamism, it must grapple with the frustrations of its youth. The government's response to this challenge may well determine China's economic development trajectory in the coming decades.

In essence, "lying flat" is more than a lifestyle choice; it is a manifestation of deeper economic and social issues. Addressing it requires a nuanced approach that balances economic imperatives with societal well-being. The stakes are high: China's continued economic rise may depend on convincing its youth that striving for success is worth the effort.

References:

[1] Translated by author (original in Chinese: 躺平即是正義)

[2] BBC. 2021. “「內卷」與「躺平」之間掙扎的中國年輕人 [Chinese young people struggling between "involution" and "lying flat"].” https://www.bbc.com/zhongwen/trad/chinese-news-57304453.

[3] Ibid.

[4] Nanfang Daily. 2021. ““躺平”可耻，哪来的正义感？[“Lying down” is shameful, where does the sense of justice come from?].” https://web.archive.org/web/20210602054559/http://epaper.southcn.com/nfdaily/html/2021-05/20/content_7944231.htm.

[5] Translated by author (original in Chinese: 毒雞湯)

[6] Ibid.

[7] HK01. 2021. “躺平主義｜內卷、韭菜、996、ZF是甚麼？10個關鍵字助你了解躺平 [Lying flat | What are involution, leeks, 996, and ZF? 10 keywords to help you understand lying flat].” https://www.hk01.com/%E9%96%8B%E7%BD%90/632955/%E8%BA%BA%E5%B9%B3%E4%B8%BB%E7%BE%A9-%E5%85%A7%E5%8D%B7-%E9%9F%AD%E8%8F%9C-996-zf%E6%98%AF%E7%94%9A%E9%BA%BC-10%E5%80%8B%E9%97%9C%E9%8D%B5%E5%AD%97%E5%8A%A9%E4%BD%A0%E4%BA%86%E8%A7%A3%E8%BA%BA%E5%B9%B3.

[8] HK01. 2021. “躺平主義｜內卷、韭菜、996、ZF是甚麼？10個關鍵字助你了解躺平 [Lying flat | What are involution, leeks, 996, and ZF? 10 keywords to help you understand lying flat].” https://www.hk01.com/%E9%96%8B%E7%BD%90/632955/%E8%BA%BA%E5%B9%B3%E4%B8%BB%E7%BE%A9-%E5%85%A7%E5%8D%B7-%E9%9F%AD%E8%8F%9C-996-zf%E6%98%AF%E7%94%9A%E9%BA%BC-10%E5%80%8B%E9%97%9C%E9%8D%B5%E5%AD%97%E5%8A%A9%E4%BD%A0%E4%BA%86%E8%A7%A3%E8%BA%BA%E5%B9%B3.

[9] RFI. 2021. “躺平主义危险吗 [Is "lying flat" dangerous?].” https://www.rfi.fr/cn/%E4%B8%AD%E5%9B%BD/20210601-%E8%BA%BA%E5%B9%B3%E4%B8%BB%E4%B9%89%E5%8D%B1%E9%99%A9%E5%90%97.