The many different ways China’s youth is reacting to the end of optimism in China

Young people in most parts of the world have to face the grim perspective that their life will probably not be better than that of their parents, and often even worse. The pandemic, the climate catastrophy, slowing global economy and the persistence and even rise of non-democratic structures lead to anxiety or denial. In China, Gen Z is reacting in many different ways: From Hippie-style “lying down” life to starting rural communes to “Full-time-Child”, “exquisite poverty” or single childless career woman. Other are hoping for a lottery win or help from the world of spirits and gods.

In October, COTRI INTELLIGENCE already discussed some aspects of the ways urban Gen Z tries out different ways to cope with their not-too-rosy looking future. Towards the end of the first post-pandemic year, lets revisit the topic in a more comprehensive way. 

Introduction

The 3rd Plenary Session of the 11th Central Committee of the Chinese Communist Party was held almost exactly 45 years ago in Beijing from December 18 to 22, 1978. It marked the start of the "Reform and Opening Up" policy under the factual leadership of Deng Xiaoping. After being seldom mentioned under Xi Jinping’s rule in the past years, the term recently showed up more frequently again in Chinese media.

It set China on the course for economic reforms, which started slowly and were close to falter at the end of the 1980s. However, in the 1990s China started an unpredicted phase of forty years of economic growth. Generation Y, born in the early years of Reform and Opening and especially Gen Z, born between 1995 and 2009, knew nothing else than a China which became richer, stronger and internationally respected.

The economic growth was bought with the acceptance of a “development dictatorship” and a One-party rule system interfering with all aspects of life. For the winners of the advent of China, especially the young urban dwellers, the idea of having your own little island in the form of an apartment you owned – and occasionally a trip abroad – were providing private contentment plus national pride. Having the opportunity to earn enough money through long hours of work to buy an apartment was the base of this contrat social between the government and the people. Apartments sold below cost supported the system until the collapse of the Ponzi schemes in the real estate industry.

Consumerism added to the private happiness with bragging power achieved on different income levels by the latest electronic devises or luxury brand apparel and accessoires, or even expensive sports cars. Spending money was not seen as a problem, as more money would come, rather from playing the stock and real estate market than from the monthly salary.

A number of developments happening at the same time put an end to this comfy arrangement for government, or rather party, and people. In the last year before Xi Jinping came to power, China still had a GDP growth rate of almost 10%. However, from 2012 to 2019 the rate continuously shrunk to arrive at 6% (official number!) in the year before the pandemic. It is currently forecast to stay even behind this number for the rest of the decade. One reason is simply the size of the economy which makes it harder to achieve such high growth rates, another is the end of the demographic dividend, as China started to shrink in number of inhabitants with an increasing percentage of older people needing to be supported.

The pandemic itself not only cost trillions of USD economically, it also showed that the government could interfere with the private life of everybody, even welding down the entrance door of the luxury apartment of rich people bringing them close to starvation, or taking them from their little private island to Corona detention centres without previous notice. Towards the end of 2022, the government had more or less to admit that all the suffering in lockdowns etc. had only postponed the dying, not prevented it.

Furthermore, the number of university graduates increased much faster than the number of management jobs in the last decade, resulting in more than 20% urban youth unemployment according to the official statistics (which stopped being published some months ago). The jobs available for those without the right parents and connections often come in the so-called 996 format, working 9 am to 9 pm, from Monday to Saturday, with overtime to boot and salaries way below the level needed for a paydown for an apartment. The role models of ambitious bright young Chinese, the Steve Jobs and Mark Zuckerbergs of China, like Jack Ma and Pony Ma have been cut down in size and their companies brought back under full government control.

Finally, the global threat of decades of increasingly worse results of the climate catastrophe has also reached the attention of the Chinese, based on unprecedented heat waves, floods, draughts etc.

As a result, the Chinese society has to find a new way of dealing with the perspective of the end of the success story of China’s endless growth. Especially Gen Z is reacting in very different ways. For the global tourism industry important is almost exclusively the urban population. However, it should not be forgotten that there are also tens of millions of young people in the countryside who grew up with parents far away in the cities working as migrant workers, with sub-standard schooling and, in the case of young men, little chances to find a wife because of the surplus of men as a result of the one-child policy. 

Lying Flat

After decades of conviction that with some luck and diligence you can make it to the level of a happy luxury consumer, during the pandemic for the first time young people in China decided to just give up the rat race and start a life with little money but more personal freedom, often encouraged by the surprisingly positive experience of slowing down during lockdowns.

The term Tang ping “lying flat”, started in the spring of 2021 and became a buzzword on Chinese social media. Unlike Japan’s hikikomori, who are socially withdrawn, Tang ping Chinese are not socially isolated, but decide to lower their professional and economic ambitions and simplify their lives, earning just enough money to cover essential costs. They have been compared to the US hippies of the 1960s, but probably are more in line with the Beat Generation of the 1950s. Their rebellion against the hard work and prosperity narrative is limited to the personal level and is apolitical, but includes millions of Gen Z members by now.

Let It Rot

A year later, in the spring of 2022, a second, more radical movement started under the headline bai lan, “let it rot”, creating hundreds of millions of posts in Chinese social media. Bai lan is used by Gen Z in China as a way of actively embracing a deteriorating situation, rather than trying to turn it around. “Dead pigs are not afraid of boiling water” is one of the slogans which got viral quickly.

Bai lan generated heavy criticism by the government and official media. Among the youngster who were told by Chairman Xi in the summer of 2023 that they should be prepared to “eat bitterness” like earlier generations to support the country, Bai lan followers were especially meant to reconsider. However, the bleak outlook of the current Chinese economy is not helping to convince those who are the Chinese members of a global movement which has been named “Quiet quitting” be some researchers.

Koukouzu

Gen Z thought leaders staying more in the mainstream today are nevertheless mostly promoting a thriftier and greener lifestyle. This new frugality, amplified by social media influencers touting low-cost lifestyles and sharing money-saving tips, brings young people in China closer to their more cautious parents and grandparents, remembering the lean years of the previous century. For Gen Z, such feelings of insecurity and uncertainty are a new experience, after believing for all their life before the pandemic that you can spend all the money you make, as you will make it back again next month.

Unlike their parents, however, thriftiness is celebrated as an act of liberation online. Videos on how to cook a dinner for RMB10 gain hundreds of thousands of followers on Xiaohongshu and Bilibili. The Chinese official media gave this movement the name "Koukouzu," (not letting go of the money), reassuring their readers that unlike the Tang ping or Bai lan followers, for these young people saving money does not mean stepping out of society. They are rather portrayed as focusing on not spending their money on unnecessary things and on buying more environmentally friendly products. With Deng Xiaoping’s “Let some get rich first” no longer en vogue in China, such an attitude is easier to accept for the current Chinese leadership.

Full-time child

The Chinese government started in the past months a movement to curb the unemployment among urban youth by telling them that they should follow the heroes of the Cultural Revolution and move to the countryside for some years, being paid on average 300 USD per month. A few young Chinese have been taking up the Hippie idea of moving to the countryside by themselves and starting a healthy life, producing biological food and living in synch with the nature.

However, another more popular post-pandemic version of reacting to the high rates of unemployment among Gen Z members is to become a “full-time Child”.

That includes moving back into the apartment of their parents and taking over the household including cleaning, cooking, transporting their parents to see a doctor etc. The parents in return pay them some pocket money which is equivalent to the wages they would earn by delivering food or by similar jobs.

The hashtags #FullTimeDaughter und #FullTimeSon have been among the most popular hashtags on Chinese Social Media in recent months. During the pandemic, many young people rediscovered the importance of strong family bonds and solidarity. A solution combining staying with the family, helping the ailing parents and solving the problem of unemployment is especially attractive for those youngsters who do not want to start a family of their own at least for the time being.

DINKies and SNKs

Staying with the parents is less of a problem if you do not want to have your own family. The oldest members of Gen Z are reaching the average age for getting married in China, which was 28.7 years in 2020, up from 24.9 years in 2010. Many of them plan to live as DINK (Double Income No Kids) couples, reluctant to shoulder all the stress and expenses connected with having a child or even several children in urban China. Others have no plans to get married at all. Many men have to stay single based on the imbalance of 11 boys chasing 9 girls thanks to the one-child policy which saw many abortions of female foetuses. Women are often reluctant to enter marriage and give up their independent lifestyle, for the traditional role of the wife is still prevalent in China. Same-sex marriages are not legal in China.

Accordingly, the number of marriages went down in 2022 by more than 10% to 6.8 million from the 7.6 million marriage registrations in 2021.

Temples and Lotteries

For domestic tourism, a surprising result has been that Gen Z as well as China’s millennials are increasingly visiting famous Buddhist temples. Different from previous years, about half of temple visitors are now under the age of 40. Without much knowledge about the background of the statues and paintings on display, Millennials and Gen Z’s burn incense and pray for good luck.

Beside imitating religious rituals probably seen on TV series, young visitors fill the shops within the temples that sell blessed objects like bracelets. Some commentators have already identified a growing “spiritual economy”, earning money from offering activities and consumption behaviours that help improve mental well-being. Selling bracelets is seen as a part of the “patriotic” Guochao trend, even though of course Buddhism is not originally a Chinese religion, but has its roots in India and Nepal. However, official media have also criticised young Chinese who spend time in temples rather than in their job working for their career. Fighting of the accusation of following superstition, many young people will point out that they see this rater as a form of entertainment.

In addition to physical charms, it is not surprising that online symbols of good luck are also booming, given the digital lives of Gen Z members. Recently, livestreamed temple experiences, including incense burning, have taken off, saving the time for a visit to the temple in person. Of course, viewers have to pay for incense burned on their behalf and candles lit for them. Even more in tune with modern Chinese life are Good luck phone cases or screensavers with pictures of the Japanese maneki-neko (beckoning cat) or the Taoist Money God printed on them. Wooden fish apps, another popular item, are downloaded by the millions onto Chinese smartphones, as this type of wood is beaten in temples to attract the attention of Lord Buddha.

In a similar way to the rediscovery of religion, Gen Z is also embracing betting and games of luck. They have been an important part of life for Chinese of all classes, genders and regions throughout history and has survived all attempts to get rid of such an anti-socialist vice. What is new in China is the fact that younger urban Chinese have started to become interested in the two state-run lotteries in China. They are not considered as gambling and offer different forms of lotto-style games marking different quantities of lucky numbers under three schemes called Double Colour Ball, Seven Lottery and Fucai 3D.

Until recently, the two state-run lotteries for Welfare and for Sport mainly appealed to middle-aged and elderly gambler, with tickets sold at newsstands and little stores and were considered hopelessly uncool by younger urban people. However, many young people have recently become more interested in trying their luck. China’s millennials and Gen Z have been brought up to look for get-rich-quick solutions, which are harder to find in a worsening economy. That’s leading many to not only buy Buddhist charms online, but also to gamble legally for small amounts. As one comment in Chinese social media said: “It seems it has become easier to win 10 million RMB then the earn 10 million RMB”. Often the content of a “hongbao”, a red gift envelope, is no longer cash but a number of scratch cards. On Douyin (TikTok), thousands of viewers watch live streams of Guaguale or “scratch off luck”, featuring people scratching off scratch cards.

Lottery ticket sales have risen by more than 50% in 2023, but scratch cards, which show you immediately whether you have won or lost, are particularly popular and are increasingly sold at many newly opened kiosks and in supermarkets. Lottery tickets are now sold through vending machines and sports lottery stands have been set up inside bubble tea stores and burger restaurants to reach a younger audience.

Exquisite poverty

The most recent trend for some Gen Z members is Jingzhi, or to embrace "exquisite poverty". The term refers to project to live an elegant life, even at the cost of going broke. Everyday expenses are cut down to the minimum to continue to buy luxuries. Gen Z consumers in this movement do not stop their former lifestyle, even if they cannot afford it anymore. Group-buying and OEM shopping are seen as ways to be able to continue to enjoy life’s luxuries. OEM or original equipment manufacturer shopping involves purchasing products directly from the factories that make them, in China or even overseas. The products might not have the brand logo but are much less expensive. How to find such manufacturers has become a major topic on Xiaohongshu and other platforms. What would have been impossible to do a few years ago, when the logo was more important than the quality of the product, is now seen as clever shopping.

Similarly, group buying is seeing a comeback in China. Turnover on the three biggest e-commerce platforms, Alibaba, JD.com, and Pinduoduo, increased dramatically during 2023. The platforms help users to share information about their purchases, invite other users to buy together, and unlock deeper discounts on reaching predefined targets. The result is not only saving money, but also the creating of the feeling of belonging to a community, an important aspect for the “lonely generation” Gen Z. Group buying was previously dominated by household items but in 2023 started to expand to beauty and fashion.

Upholding consumerism in the face of economic uncertainties, “exquisite poverty” is a strategy for those who have not (yet) given up the struggle to maintain a semblance of their aspirational lifestyles by identifying themselves as savvy consumers with knowledge about quality and value.

Gen Z and outbound travel

The discussion above should illustrate clearly the many different forms of consumption among Chinese teenagers and young adults below the age of 30. For example, full-time childs will probably travel with their parents. In the past, three-generation groups with the middle age couple paying for their own parents and the kid being the master of the itinerary created a typical Chinese market segment. Now a new one enters with the parents paying for their accompanying adult son or daughter, with no kid in sight. Others will be much more interested in all things spiritual and sustainable, or will try to get good bargains without being perceived to have to bargain because of lack of funds. Even Tang ping and Bai lan followers can become customers for outbound tourism service providers if the right marketing is done to distinguish their motives and activities from the common forms of consumerism.