SHANGHAI — China’s May retail sales rose 12% year over year, announced Wednesday, but fell below market expectations as the growth was largely driven by declines induced by the COVID-19 pandemic.
Restaurant revenue and home appliance sales remained weak. The rise in youth with low spending motivation may be behind sluggish consumption, which puts the Communist Party on alert.
In fact, the motto tangping, or “too late”, has circulated on China’s Internet forums in recent months, symbolizing the rejection of the pressing race for a better economic life.
State media have sparked a heated debate after efforts to dispel this widespread belief among Chinese youth. The idea goes against President Xi Jinping’s long-term growth strategy of boosting domestic demand to address the uncertainties driven by the ongoing tensions with the US and the COVID-19 pandemic.
Is China headed for a Japan-style period of lost decades? Or, to paraphrase a classic American rock song, do the many Chinese youths competing only want their own peace of mind?
Here are five things to know about “lay-flatters” and why they matter to the Chinese economy.
What do the latest retail figures show?
Retail sales in May fell short of the 14% growth expected by analysts and 17% growth in April. May’s data also supported the base effect after a steep fall in the previous year when the economy was hit by the pandemic. The two-year average growth is only 4.5%.
Citi Research reported on Wednesday that all key economic activity indicators missed expectations in May, as China’s peak growth momentum has passed. It cited widening income inequality, rising debt burdens and sustainable behavior change to hold back household spending.
“In light of continued retail weakness and sluggish holiday activities, [we are] are now increasingly convinced that the pandemic’s shadow on consumer behavior may be longer than we anticipated,” the report said.
Who are the “Lay-Flaters”?
Tangping is yet another buzzword coined by netizens who often play with the rich meanings of Chinese characters. It literally means lying flat, but the underlying tone was the norm considered to be a decent education, followed by the meaning of retreating to a career and raising a family.
It is the ironic result of China’s four decades of rapid growth, pushing expectations and cost of living through the roof. netizens called it nijuan, which means inclusion arising from stagnation. An apartment in a working-class neighborhood in Shanghai can easily cost 3 million yuan ($466,000), far more than the means for college graduates with a monthly salary of 6,000 yuan.
The harassment reflects the growing frustration among Chinese youth, who are bearing the brunt of pressure from family and society on topics ranging from education to marriage. Confucius encourages hard work and merit as the keys to better opportunities in virtuous life. But lay-flatters take the opposite route, preferring a quiet life centered around their own actions.
Why are they in the limelight?
How widespread the Tengping phenomenon is among Chinese youth is unclear, but the group holds potentially strong spending power to advance the country’s economic growth.
The Chinese government, which is battling with the country’s falling birth rate and uncertain economic growth, is afraid of adopting a relaxed attitude. The state-affiliated Guangming Daily ran an article last month urging Beijing to pay attention and assist lay-flatters.
“Tangping will bring many disadvantages to economic and social development,” it says. “The goal of high quality development cannot be achieved without the constructive contribution of our youth.”
The article by Wang Jingyu, an official at the China University of Labor Relations, advocates fair and competitive market conditions to realize high-quality economic growth and individual achievements.
But Li Fengling, an associate professor at the prestigious Tsinghua University’s Institute of Education, said in another article an apologetic tone, “Tangping is an irresponsible attitude, an insult to parents and an insult to millions of hardworking taxpayers.”
The Tsinghua article angered netizens. In the past three weeks, the hashtag #TsinghuaProfessor on microblogging website Weibo has called the tight mentality irresponsible. It has been viewed over 400 million times.
“roll on [with competition] While I lay flat,” one commenter replied. The author describes himself as a 32-year-old whose “greatest stress” is taking care of his aging parents.
“I don’t want to get married and have kids,” she said. “I don’t socialize and I don’t buy a house or a car, only spend minimal. Entertainment comes from my smartphone. The most rewarding thing in life is some good food. Life can be boring but interesting life costs a lot of money “
Another comment read, “Please check who helped the professor write this piece.”
Others draw parallels with the experience in Japan. Post-war industrialization led to high economic growth before the country’s bubble economy burst in the early 1990s, followed by years of stagnation that some economists call the lost decade.
“Japan’s experience probably bothers so-called lay-flatters that one should grow old before becoming rich,” said Jiang Jian, a 28-year-old car salesman in Shanghai. “Maybe I can’t agree with the convoluted thinking, but I can relate.”
Xi is keen to control any narrative that defies the policy of maintaining stability. China has yet to take the drastic step of removing online posts related to Tangping.
State media have published articles presenting the pros and cons, stating that Tungping is not just for China. Many developed economies have seen a similar withdrawal phenomenon among their populations.
Jacob Cook, chief executive of WPIC, an e-commerce consultancy in Beijing, said he does not expect the lay-flat trend to affect consumption. Although he recognizes the competitive societal pressures on young people, he also sees a ray of hope.
“In general, there is no shortage of people applying for jobs, and incomes are rising,” Cook told Nikkei Asia.