TANGJIALING, China | Liu Jun sleeps in a room so small that he shares a bed with two other men. It’s all the scrawny computer engineering graduate can afford in a city so expensive that the average white-collar professional can’t afford to buy a home.

A dim fluorescent bulb hangs from the ceiling of the 180-square-foot room on the fringes of Beijing. The floor is littered with cigarette butts, dirty laundry and half-eaten paper bowls of spicy instant noodles.

“This is what I get for living with two guys,” the 24-year-old Mr. Liu says, hunched near a pile of used computer parts. He’s a chain-smoker who speaks rapid-fire fast. “It’s not just the mess and lack of privacy, but it’s also embarrassing to bring girls home.”

The dreams of many young educated Chinese are running up against the realities of China’s rapid economic ascent. Rising living costs and low salaries - the result of a surfeit of university graduates - are dashing high expectations.

“I didn’t want to be stuck in a small town forever, you know, like the frog in the well,” says Mr. Liu, who comes from a coal city in the often frozen far north. “I dreamed of achieving success on my own terms in the big city.”

One day he may. For now, Mr. Liu has joined the “ant tribe” - the millions of young Chinese so known for crowding together in the slums of China’s largest cities.

His home is about an hour north of downtown Beijing, down a tree-lined path where a rusty sign welcomes newcomers. Once a small village of farmers and laborers, Tangjialing emerged as a cut-rate bedroom community in 2003 after the opening of massive software parks nearby, including the headquarters of computer-maker Lenovo Group and the widely used Internet search engine Baidu.com.

Now four- to six-story cement buildings in pastel hues dot the village. Most rooms contain little more than a wardrobe, a bed and a nightstand. There’s no air conditioning in weather that can reach above 100 degrees. Rent is $45 to $100 a month. Those willing to pay $15 more get a bathroom. Others use the public bath.

The term “ant tribe” was coined by Lian Si, a professor who wrote a book with that title about the post-1980 generation.

“Unlike slums in South America or Southeast Asia, these villages are populated with educated young people as opposed to laborers or street peddlers,” says Mr. Lian, who teaches at the University of International Business and Economics in Beijing.

The Chinese born after 1980 are among the most privileged generation in China’s long history. Living after the communist government gave up the radical politics that tossed their parents and grandparents between chaos and penury, they have known only ever-rising levels of prosperity.

In their lifetimes, gleaming new office towers have remade China’s cities. Hundreds of millions have been lifted from poverty. Travel abroad, private cars and apartments. and a university education - all once the preserve of the elite - are increasingly common.

Vibrant megacities such as Beijing and Shanghai are the epitome of this good life. So the ant generation comes, bringing its aspirations.

But their very abundance keeps entry-level salaries low, while housing and other costs rise. Real estate prices have doubled in just three years in major cities, outpacing a 40 percent increase in urban wages from 2005 to 2009.

“This is the biggest struggle for China’s young generation today,” says Liu Neng, a sociology professor at Beijing University. “People in their 40s and 50s, now leaders in society, have already experienced hardships, but it’s the younger generation’s turn to face challenges before they become part of the country’s elite.”

When it rains or snows in Tangjialing, the dirt-covered streets become slurries of mud. On work days, legs and purses spill out the doors and windows of crammed buses.

To save her $300 a month salary as a data entry clerk, Shang Meirong showers only once a week in the winter and three times a week in the summer in Tangjialing’s communal bathhouse, which costs 70 cents per use.

“I don’t sweat that much in the winter and it’s not cheap, so we shower when we need to,” says Ms. Shang, a petite 22-year-old from Cangzhou, a city two hours outside Beijing.

The competition for jobs is fierce. Nearly 70 percent of high school graduates are expected to enroll in university this year, according to state media, compared with 20 percent in the 1980s. There are more college graduates than readily available jobs - a once unthinkable situation.

“Trying to find a job that pays enough to survive is much harder than I imagined,” says Ren Yanguang, who makes $150 a month as an intern at a local software company in Beijing, where the average income is four times that. “It’s frustrating because if I don’t find a job soon, then I’ll have no choice but to leave.”

Most Tangjialing dwellers, Mr. Lian says, come from farms and small cities and don’t want to return, fearing the boredom or being labeled failures.

“It sure sounds good if you’re a parent and you tell the whole village your son is working in the capital,” Mr. Lian says. “And it’s a huge deterrent because they want their family to be proud.”

For Mr. Liu, the computer engineer, coming to the capital city was a chance to live China’s version of the American dream. In his final year at Northeast Petroleum University, he rebuffed his parents’ efforts to get him a cushy job at a state-owned company back home in Jixi city. “I came to Beijing because I wanted freedom from them, too,” Mr. Liu says.

He wound up in Tangjialing late last year, about eight months after moving to Beijing. The village is near the software park where he landed a job, and he recruited two college classmates as roommates.

For about $90 a month, they got one of the better rooms, furnished with a queen-sized bed, two desks and a small wardrobe. It has a bathroom and, unlike the cheaper apartments, a small window that lets in slivers of light. They have attached a lounge-chairlike folding bed to the mattress in case someone rolls over or wants to spread out.

“When I first got here, Tangjialing felt claustrophobic with people living in such close quarters, but I got used to it and it quickly became home,” Mr. Liu says.

On the evenings he and his roommates aren’t clocking overtime, they grab dinner together - often instant noodles but sometimes stir-fried shredded pork and vegetable dishes bought nearby.

Entertainment is mostly chatting online with friends or playing computer games. Without much money, Mr. Liu confesses on his blog, life in the big city can be quite dull at times.

After taking a new job selling computer hardware in April, Mr. Liu’s $30 share of the rent allows him to set aside much of his $400 salary for a nest egg that he hopes will help him start his own software company one day.

“I always ask myself if it’s worth it,” he says. “When I was in school, this isn’t how I wanted life to be, but I chose this path so I can’t look back.”

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