As full-time jobs decline in China, the gig economy is expanding quickly. The gig economy refers to a temporary employment economy such as platform work. But there are concerns that platform workers' unstable income and low social insurance enrollment rates could create new burdens on the nation's consumption recovery and welfare finances.
According to Reuters on the 7th, the China New Employment Forms Research Center, a Chinese think tank, projected that flexible workers who work without full-time contracts will reach 320 million this year. That is an increase of 40 million from last year's 280 million, accounting for about 44% of China's total workforce.
Experts said platform work is filling the gap in full-time employment as construction jobs have decreased due to the real estate slump and manufacturing headcount has fallen amid automation, tariff burdens, oversupply, and intensified price competition. Recently, even college graduates and white-collar workers who lost jobs due to weak domestic demand and the adoption of AI have been flowing into the platform labor market.
Hong Kong Polytechnic University anthropologist Yang Zhan said, "Platform work has spread to the middle class and college graduates." She added, "As China's manufacturing upgrades, industries that once provided mass employment are disappearing, and AI is accelerating this change."
The expansion of the gig economy is also creating new side effects. Because most platform workers are not required to enroll in social insurance, they fall into blind spots in the social safety net, including pensions and health insurance.
A government official in China told Reuters, "Platform work has unstable contract forms and income, making it difficult to expand social insurance enrollment," adding, "The solution is to foster the services sector to increase quality full-time jobs."
In practice, many platform workers are choosing to save money directly rather than enroll in social insurance. Of 12 flexible workers interviewed by Reuters, only two had voluntarily enrolled in social insurance.
The Chinese Academy of Social Sciences projected in 2019 that the national pension fund could be depleted by 2035, and last year it said extending the retirement age could delay depletion by eight to nine years.
While employment has been maintained, income conditions are said to be worsening. Wages for 37.2 million drivers on China's ride-hailing platforms fell 1.8%. At least four cities, including Shenzhen, warned that the ride-hailing market had already reached saturation since April.
Ding Lu, chief China economist at Nomura, said, "It is urgent to make it easier for flexible workers to be incorporated into the social security system," adding, "Reducing anxiety can lower savings and increase consumption."
Frederic Neumann, chief Asia economist at HSBC, said, "Platform work does not provide the level of wages and stability that many Chinese expect," adding, "A new generation is emerging that has not experienced the stability their parents enjoyed, and that could constrain consumption and economic growth."