China's gig economy is experiencing unprecedented growth, with 320 million people expected to be in flexible employment this year, according to the China New Employment Forms Research Center. This represents a significant increase from 280 million in 2025, creating a workforce cohort nearly as large as the US population and accounting for approximately 44% of China's total workforce. As reported by Business Standard, this shift is driven by a weak labour market, AI adoption, and a property downturn that is pushing workers into gig jobs as formal employment opportunities become scarce. Analysts say China's gig economy has become a crucial employment buffer as the property crisis wipes out construction jobs and manufacturers shed workers through automation and cost-cutting amid tariffs, overcapacity and price wars.
The gig economy is no longer limited to traditional workers but has expanded to include educated professionals and middle-class individuals. Bao Zhang, a 30-year-old software tester who lost his job and now drives for a ride-hailing app, exemplifies this trend. According to Business Standard, he works from 7 a.m. until nearly midnight in Beijing to earn approximately ₹6,000 ($885) per month after vehicle rental and charging costs. Cultural anthropology expert Yang Zhan from the Hong Kong Polytechnic University noted that the proportion of gig workers is extremely high, spreading beyond rural migrants to include university graduates and middle-class individuals. "Those who used to take taxis now have to drive them themselves," said the 30-year-old, highlighting how traditional employment is being replaced by gig work.
The rise of gig jobs, where social insurance contributions are not mandatory, is creating long-term risks for China's inadequately funded welfare system. A 2019 Chinese Academy of Social Sciences report warned that the national pension fund could run out by 2035 as the population ages, with a 2024 update suggesting delaying retirement could push depletion back eight to nine years. As reported by Business Standard, central government transfers to plug social insurance budget gaps have roughly trebled over the last decade to about ₹3 trillion ($380 billion), doubling as a percentage of total expenditure to 10%. A December 2025 government report found that by end-2024 only 70.6 million flexible workers were enrolled in the urban employee pension scheme, which supplements basic retirement benefits. Most migrant workers contribute small amounts only to the basic scheme, where payouts can be as low as ₹163 ($2) per month.
Despite the growth in gig workers, wage pressures are emerging as supply increasingly outpaces demand in certain sectors. According to Business Standard, China's 16 million food delivery riders saw their income rise 11% on average to ₹37.3 ($0.50) per hour in 2025, while wages shrank 1.8% for the 37.2 million ride-hailing drivers. At least four cities, including Shenzhen, have issued warnings of ride-hailing market saturation since April. A Peking University survey of 30,000 delivery workers found fewer than 10% would support mandatory social security contributions, which would cost employees about 10% of their income and employers roughly a quarter. Only two of the 12 flexible workers Reuters interviewed said they were voluntarily contributing to social insurance schemes, with most preferring to save on their own.
The gig economy's impact on social security participation remains concerning, with limited coverage despite the growing workforce. According to Business Standard, only 70.6 million flexible workers were enrolled in the urban employee pension scheme by end-2024, which supplements basic retirement benefits. Most migrant workers contribute small amounts only to the basic scheme, where payouts can be as low as ₹163 ($2) per month. Nomura's chief China economist Ting Lu estimates only tens of millions are fully enrolled in all social insurance schemes, emphasizing the urgent priority to make it easier for flexible workers to be included in employee social security systems. "The urgent priority is to make it easier for flexible workers to be included in the employee social security system," said Lu, adding that "We need to reduce anxiety," so that they save less and consume more.
