A university slogan in China captures a belief that has shaped generations of students: “Learning determines today, and learning also determines the future.”
For decades, that belief powered one of the most remarkable development stories in modern history. Through reform, urbanisation, and rapid industrialisation, China lifted nearly 800 million people out of extreme poverty and accounted for the overwhelming majority of reduction in global poverty rates over the past 40 years.
Nevertheless, China’s economy has gradually moved beyond the phase of high-speed growth that defined earlier decades. The cooling of China’s housing market since 2021 has reached far beyond real estate itself. For many Chinese families, housing remains the main store of wealth, so the slowdown has weakened confidence. For local governments, who have long been dependent on land sales for revenue, it has also created mounting fiscal pressure. Meanwhile, low fertility and population aging are beginning to narrow China’s future workforce, while weak consumer spending makes it harder for the economy to depend on domestic demand. Even so, China has continued to demonstrate a degree of resilience. GDP growth of 5% in 2025 remains an impressive figure for a large economy like China, especially in a period of weak global demand.
Yet for China’s long-term development, the more important question is not only how fast the economy can grow in the short term, but whether the social foundation underpinning that growth remains intact. Analysts debate housing, local debt, technological development, exports, and fiscal support. Those issues matter, but they do not fully explain how China rose in the first place. China’s growth was never only a story of policy design or capital accumulation. It was also a story of ordinary people working extraordinarily hard, sacrificing for their families, and believing that education and effort could move them upward. That kind of belief is easy to overlook because it is not usually written into macroeconomic models, yet it may be one of the most important conditions for China’s long-run growth.
This belief, moreover, was not self-generating. It was cultivated by institutions and reinforced by social narratives, above all the gaokao, China’s national college entrance exam and one of the country’s most important gateways to educational opportunity. For generations, it helped sustain the reform-era promise that study, discipline, and sacrifice could still change one’s life. The question now is whether that promise remains as widely credible as it once was.
Today, that belief looks increasingly uneven. Among China’s young elites, it remains powerful — at Tsinghua University, one of China’s most selective universities and a national symbol of educational mobility, students still show a strong faith in advancement and a striking willingness to work. In my hometown of Huaining County, however, the picture is more mixed. The older belief survives in a 75-year-old who still wakes before dawn for a day at the factory, holding on to the idea that effort can still secure dignity and progress. Yet outside China’s most selective universities, the picture is more uncertain. Many young people now face a crowded transition into work, with graduates pushed into low-paid jobs, temporary posts, repeated exam preparation, or periods of dependence at home. It is no longer uncommon to see a 21-year-old spending his days at home playing video games, neither studying nor working. These contrasts suggest that China may be entering a more uneven phase of human capital development.
That possibility should concern policymakers more than it currently does. The popularity of “tang ping” (躺平), or “lying flat,” made that shift impossible to ignore. The term entered public discussion in 2021 after a post titled “lying flat” emerged on Baidu Tieba, the Chinese version of Facebook, and came to describe young people stepping back from high-pressure competition around education, employment, housing, and status. It resonated because it gave language to a feeling many young people already had — that the link between hard work and mobility has become less predictable. To lie flat was to want less, do less, and stop running a race that no longer seemed worth winning.
When people no longer believe that hard work will bring mobility, many become detached. As China’s development model evolves, maintaining a broadly shared sense of possibility may be just as important as managing growth itself.
Why, then, are more young people feeling this way? The first reason is straightforward. Education no longer guarantees mobility as clearly as it once did, with too many graduates competing for too few desirable opportunities. China is expected to produce 12.22 million college graduates in 2025, while the official unemployment rate for 16-24 year-olds excluding students stood at 16.5% in December 2025.
A second reason is subtler. China’s own development has changed the conditions under which the next generation makes choices. Many young people today grew up in materially more secure circumstances than their parents did. Official data reflect that shift: the national Engel coefficient, a common proxy for how tightly household budgets are constrained by basic needs, fell from 63.9% in 1978 to 30.5% in 2022. This is a major achievement in development. But it also means that the pressure once imposed by scarcity is weaker than before. When life feels less precarious and hard work no longer seems to promise clear rewards, stepping back becomes easier to imagine.
A third reason lies in how success is socially defined. Too many families still treat the path to a dignified future as unusually narrow. The civil service exam, a route into stable government jobs, shows how intense this competition has become. In 2025, there was roughly one national civil service position for every 86 qualified applicants. At the same time, recent research finds that intergenerational educational mobility in China has been declining for people born in more recent decades. That disappointment entered popular language in 2023, when “Kong Yiji literature” spread online. Named after Lu Xun’s fictional failed scholar, the phrase captured young graduates’ fear that their education had given them expectations they could no longer turn into opportunity. In that environment, disappointment can arrive early and hard, leaving many capable young people feeling that they have already fallen behind.
This is where the economic debate needs to widen. Discussion of China’s future often focuses on the familiar macroeconomic variables. But headline performance captures only part of what sustains long-run dynamism. The deeper question is whether broad sections of society still feel that effort will be rewarded and advancement remains within reach.
I remain confident in China’s long-term prospects. But the real question is whether the drive that powered its rise will remain broadly shared. If ambition is increasingly concentrated only in top universities, top firms, and a handful of major cities, China may continue to innovate, but on a narrower base than before. This would not prevent China from continuing to grow and innovate, but it could narrow the social foundation on which long-term development depends. The process of development changes not only material conditions, but also people’s expectations of advancement and their confidence in the future. A key feature of China’s earlier growth experience was that many ordinary people believed that through sustained effort, life could continue to improve. If such expectations are no longer broadly shared, then short-term policy support alone will not fully resolve the problem.
