China's recent economic phenomena reflect deep societal concerns encapsulated by the term neijuan or involution. This term, rapidly gaining traction among the younger generations, describes the frustrating experience of working harder without achieving significant results, leaving many feeling stagnant.
Originally, neijuan is translated as "rolling inward," depicting societal and individual stagnation, where efforts yield little reward. This has particularly stung millennials and Generation Z, generations born during the economic boom of the 1980s, '90s, and early 2000s, who now perceive bleak prospects compared to their parents. Despite their educational qualifications, many young individuals are discovering it increasingly difficult to secure well-paying jobs, leading to disillusionment.
The term exploded onto social media during the COVID-19 pandemic, especially after a viral moment captured Tsinghua University students dubbed the "involution king", symbolizing the absurd pressures of China's competitive environment. This phenomenon has since been linked to numerous factors driving China's economic struggles, including high youth unemployment, which soared to record levels by 2023, hitting 21.3% as reported.
One of the primary causes of neijuan is excessive competition without substantial innovation across various sectors. Despite significant investment, industries such as renewable energy are grappling with overproduction, leading to fierce price wars and plummeting profit margins. Robin Zeng, chairman of Contemporary Amperex Technology, expressed concerns over this situation at the Global Energy Storage Conference, stating, "Low prices driven by inferior quality and cost-cutting don’t bring economic benefits and lack sustainability."
The educational sector is experiencing similar pressures, where students engage in an arms race of extracurricular activities to secure spots at prestigious institutions. This has resulted from government policies like the 2021 "double reduction" initiative, which banned for-profit tutoring businesses to ease academic pressures but resulted in massive layoffs, with estimates of around 10 million jobs lost.
Certainly, local governments have also fallen prey to involution, engaging in destructive competition to attract businesses without regard for long-term economic sustainability. This notion of "race to the bottom" has been detrimental to regional stability, prompting policymakers to reevaluate their strategies.
China’s leaders are acutely aware of the pitfalls of neijuan. Premier Li Qiang emphasized during the World Economic Forum the spiraling of involution and its urgent nature, advocating for strategic shifts to combat this challenge. At the Central Economic Work Conference, policymakers pledged to address involutional competition and implement rectifications across affected sectors.
These efforts reflect the need for reform, highlighting long-term planning, innovation, and regulatory measures to reverse the harmful effects neijuan has perpetuated. Several industry leaders are rallying behind this cause, recognizing the importance of moving beyond short-termism to secure future viability.
The social impact of neijuan resonates deeply with younger generations, many of whom are now redefining success and embracing movements like tangping, which promotes the idea of lying flat to counteract relentless competition. Such cultural shifts signal the growing dissatisfaction among youths, driving them toward alternative lifestyles detached from traditional success metrics.
Meeting the challenges of neijuan is not solely about improving economic metrics. It carries monumental social imperatives, requiring thoughtful engagement from policymakers and society as they aim to rejuvenate hope and potential for future generations. The path out of this societal stagnation may require innovative solutions and genuine investment in the aspirations of youth.
Ending this spiral of involution will necessitate sustained efforts to address systemic inefficiencies and empowering the younger workforce. While the challenges are formidable, recognizing and responding to the frustrations encapsulated by neijuan is pivotal for China to navigate its future.