Lying flat in Shanghai

I’m a little late to the party, but a few months ago there was a hot topic on Chinese social media about “lying flat” (躺平).

The way I understand it, long working hours, low average incomes, and high property prices in recent years have contributed to a soul-crushing rat race that the new generation of Chinese workers want to opt out of. Typically, they achieve this by living with parents and eliminating as many lifestyle expenses as possible.

This is not a new phenomenon. For example, in Japan, social issues such as “hikkomori” and “parasite singles” have been pervasive for decades, partially driven by the Japanese economy’s stagnation since the early 1990’s. I suppose it’s no wonder that the Chinese government was so alarmed by the 躺平 movement and quickly censored all mentions of this topic on social media.

On the other end of the spectrum, there are discussions of what it means to be middle class and what it takes to "truly 躺平". In a recent WeChat post, I incredulously read that the suggested net worth for financial freedom in a tier 1 city (Shanghai) is 30 million RMB.

I think this is a ridiculous number. It’s a falsely constructed challenge meant to discourage the 99% of Chinese who know they will not achieve this. I can’t speak for the millions of blue collar workers who indeed have a tough life ahead, but I think I can speak for you, the reader of this blog. To lead a fulfilling life, you don’t need to delete your career, and you don't need to accumulate 30 million in assets. These are two extreme ends of a spectrum. I can tell you that there is a better way - a middle ground.

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Since I live in Shanghai, I’m most familiar with the challenges faced by newcomers to Shanghai (新上海人), who have obtained a Shanghai hukou but do not own property here. The remainder of this post is advice that’s intended for readers who fit this description, though I think it can be adapted for other cities and situations as well.

FIRE is the ultimate goal

Short for “financial independence/retire early”, the journey towards FIRE is - in my opinion - a much more worthwhile life philosophy than 躺平.

FIRE doesn’t mean that you have no job. It means that not having a job (even if it’s for a long time) will not affect you financially. In practice, most people still do some work for money even after achieving FIRE because they enjoy it.

FIRE doesn’t mean that you do nothing. It means that you have the choice to do nothing if that is what makes you happiest. Most of us actually aren’t happiest when we do absolutely nothing.

Save at least half of your salary income

If we spend 100% (or worse, over 100%) of our income, our savings rate is 0% and we will never achieve financial independence - no matter how high our salary is.

If we are somehow able to spend 0% of our income, our savings rate is 100% and we’re already financially independent. (Obviously, this scenario isn’t realistic.)

Therefore, the only way to achieve FIRE - barring inheritances or winning the lottery - is to save a significant portion of our income. This requires us to restrict our spending and “live below our means."

Be warned that it’s more difficult than it looks, and will almost certainly require lifestyle changes that seem like sacrifices at first. Common steps to take are selling your car if you own one, practicing minimalism, and cooking/eating at home most of the time.

Avoid the city center

Housing cost is usually the biggest budget item for most families. This is determined by where you live, which is usually determined by where you work. Therefore, choose where you work wisely. In the case of Shanghai, the best CBD to work in is 虹桥. It’s home to 70,000 companies, including 380 that have established their global or regional headquarters there.

Working in 虹桥 provides the flexibility to live in a location that’s far away from the city center but close to a subway station (eg. 青浦新城) where rent and housing prices are 25-30% of prices in central Shanghai. Living in a low-cost area and not driving are perhaps the two lifestyle decisions you can make that save you the most money over the long-term.

Find a side hustle you enjoy

These days, the concept of 斜杠青年 is growing in popularity among young professionals in China. Spend your daily commutes learning, and your weekends making use of your skills/hobbies to build an audience or make some extra cash (or both).

Ideal activities can be done remotely and/or make you money in ways that are not directly tied to your time. The former is perhaps easier; examples include tutoring online or freelance software development/design. Examples of the latter include live streaming or cultivating a popular WeChat public account.

Relocate or immigrate

Once you've accumulated substantial assets, established some passive streams of income, and gained the ability to work remotely, there is no need to stay in a high cost of living area such as Shanghai.

If you have kids, seriously consider immigrating to a western country such as Canada, where the competition in schools is not nearly as fierce and educational resources are more fairly distributed.

If you don't have kids, your choices are quite extensive (once the pandemic blows over). You could choose a low cost of living area such as Thailand or Malaysia, or Chinese cities with a slower pace such as Chengdu, or foreign cities with great lifestyle for money such as Barcelona or Berlin. Check sites that cater to digital nomads for more ideas.

Ultimately, I think there's no reason to give up and do absolutely nothing, even in today's competitive environment. I agree with avoiding competition, but I don't agree with total inaction. Instead, live life with a vision of where you want to be in the future. Save. Take the time to learn new things. Build an audience. Seek new surroundings and experiences.

We get just one shot at life. Don't take it lying down.