In recent years, China has faced a growing demographic crisis characterized by a rapidly declining birth rate and an aging population, posing significant challenges to its economic and geopolitical aspirations. A new phenomenon compounding this issue is the emergence of shocking-yet-popular new trend among young Chinese, a social movement where individuals reject societal pressures to work grueling hours for low wages and instead embrace a lifestyle of minimal effort, often retreating from traditional ambitions like career advancement and family-building. This social media – driven movement, an evolution of the earlier "lying flat" lamentation, reflects a broader disillusionment among China's youth, driven by economic stagnation, hyper-competitive job markets, and soaring living costs. Together, these trends threaten to undermine President Xi Jinping's vision of surpassing the United States as the world's leading economic and military power.
China’s "Rat People": A Silent Squeak of Desperation
The "Rat People" mindset, which gained traction earlier this year, represents a significant shift in the mindset of China's younger generation. Unlike the "996" work culture—9 a.m. to 9 p.m., six days a week—championed during China's economic boom in the 2010s, Rat People proponents embrace a minimalist lifestyle, spending their days in bed or online, deliberately disengaging from the relentless pursuit of professional and financial success. This movement stems from a combination of factors: (1) Youth unemployment reaching 16.5% in urban areas for 16- to 24-year-olds in March 2025, (2) Wages having stagnated, and (3) The skyrocketing cost of living, particularly in the housing sector.
For many young Chinese, the promise of prosperity through hard work no longer holds true. The economic slowdown, coupled with a property sector crisis where over two-thirds of household wealth is stored, has eroded confidence in the traditional path to success. Unlike their parents, who benefited from China's rapid economic rise, today's youth face diminishing returns on their efforts. As Steve Tsang, director of London University’s SOAS (School of Oriental and African Studies) China Institute, noted, "Xi may want young Chinese to focus and work hard to make China a technology and innovation powerhouse, but he cannot succeed if people are not interested in doing so." While currently a minority, the Rat People anomaly could have significant economic implications if it grows, reducing workforce participation and consumer spending, both critical to Xi's vision of a consumption-driven economy.
Declining Birth Rates and Women's Resistance to Pro-Natal Policies
Parallel to this is China's deepening demographic crisis, driven by a record-low birth rate and women increasingly rejecting traditional roles of marriage and motherhood. In 2024, China's population shrank to 1.408 billion, a drop of 1.39 million from the previous year, marking the third consecutive year of decline. The birth rate, at 6.77 per 1,000 people, remains far below the 2.1 times base replacement rate needed to sustain the population. Despite the government's shift from the one-child policy (1980–2015) to a three-child program in 2021, births have continued to plummet, with only 9.54 million babies born in 2024.
Xi has prioritized boosting fertility, urging women to embrace a "new culture of marriage and childbearing" and framing it as a patriotic duty. However, these efforts have largely failed. Young women, particularly those empowered by education and career opportunities stemming from the one-child policy, are resisting pressures to return to traditional domestic roles, mirroring earlier curves in Japan and South Korea. High costs of raising children—estimated at 6.9 times China's per capita GDP, compared to 4.11 in the United States—combined with inadequate childcare and social safety nets, deter family formation. Moreover, marriage rates have fallen to a historic low of 4.8 per 1,000 people in 2022, reflecting changing social norms and economic pressures.
Government policies, such as restricting non-medical abortions and imposing a 30-day "cooling off" period for divorces, have further alienated women by limiting their reproductive autonomy. An analysis of nearly 150,000 court rulings showed that around 80% of divorce petitions filed by women were denied on the first try, often despite evidence of domestic violence, further discouraging marriage. As demographer Wang Feng notes, "Policy has little, if any, influence on Chinese young people's reproductive choices and behaviors." This resistance, coupled with a declining number of women of childbearing age, suggests that China's fertility rate, currently at 1.01 births per woman, may fall even further.
Socio-Economic Impacts: A Shrinking Workforce and Economic Strain
The combined effect of the "Rat People" movement and declining birth rates poses a severe threat to China's economic stability and Xi's goal of overtaking the United States. China's demographic dividend, which fueled its economic rise from 1980 to 2000 by providing a large, young workforce, has been exhausted. The working-age population is shrinking, with a projected 20–30% reduction in workers aged 20–29 by 2026. By 2035, the retirement-age population is expected to exceed 400 million, surpassing the entire U.S. population, placing immense pressure on pension and healthcare systems.
An expanding Rat People scenario exacerbates this by reducing labor force participation among the youth. As more young people opt out of the workforce, China's productivity growth, critical for transitioning to an innovation-driven economy, is at risk. The rigid hukou system, which restricts rural migrants' access to urban services, further limits workforce mobility and adaptability, entrenching economic disparities. Additionally, low consumer confidence and high household savings rates—driven by inadequate social safety nets—hinder Xi's "dual circulation" model that relies on domestic consumption increases.
The demographic crisis also strains government finances. Local governments, burdened by high debt and shrinking revenues, struggle to fund pro-natalist policies or expand social services. The cost of supporting an aging population, coupled with fewer workers contributing to the economy, threatens to create a "humanitarian catastrophe" if not addressed, as warned by demographer Yi Fuxian at the University of Wisconsin – Madison.
Geopolitical Implications: Undermining Xi's Global Ambitions
President Xi, whose family name means “to hope” or “to admire” professes a vision of establishing China as the world's economic and military leader that hinges on sustained economic growth and a robust workforce. The demographic crisis and Rat People directly undermine these goals. A shrinking and aging population reduces China's economic dynamism, limiting its ability to compete with the United States, which benefits from a more favorable demographic profile and higher per capita wealth through a means that is not available to China - Immigration. By 2080, China's population could fall below 1 billion, and by 2100, it may drop to 633 million, severely constraining its global influence.
Militarily, a declining youth population limits the pool of recruits for the People's Liberation Army, potentially weakening China's ability to project power. The gender imbalance from the one-child policy, with 104.69 men per 100 women in 2022, may also create social instability, as 20–30 million men face the prospect of being unable to find partners. This could lead to internal unrest, diverting resources from military modernization. Xi's hawkish foreign policy, including ambitions to control Taiwan and reshape the global order, relies on economic strength and domestic stability. However, demographic and social inclinations suggest that time is not on China's side. As Wang Feng argues, these challenges should push China toward cooperative relations with the West to access markets and technology, but Xi's aggressive stance may instead heighten tensions, risking strategic miscalculations.
Year of the Rat
The burgeoning herd of Rat People and China's declining birth rates reflect deep-seated economic and cultural shifts that threaten Xi Jinping's ambitions for global dominance. The youth's rejection of traditional work and family roles, combined with women's resistance to having children, is accelerating a demographic crisis that undermines China's economic and military potential. Without significant reforms—such as improving social safety nets, addressing gender inequalities, and easing economic pressures—China risks economic stagnation and social instability, akin to Japan's experience since the 1990s and South Korea’s from 2010 onward. For Xi, the challenge is not only to reverse these trends but to do so without alienating a generation increasingly at odds with the Communist Party's vision. The path to overtaking the United States as the world's leading power grows narrower as China's demographic and social crises deepen.
