China’s Gig Economy Faces Economic Risks Amid Resilience Signs

China’s growing population of gig workers presents potential economic challenges, despite the country’s unexpected resilience in 2023. According to reports from Beijing-based correspondent Hong Soon-do, the nation’s economy is projected to achieve a trade surplus exceeding $1 trillion this year, while growth is anticipated to meet a target of around 5%. However, the substantial number of flexible workers poses a significant risk that could undermine this progress.

The term “flexible workers” encompasses a diverse group, including freelancers, food delivery personnel, couriers, and ride-sharing drivers. As reported by Hong, more than 200 million individuals are engaged in these types of employment across China, often lacking stable job security. While many earn an average monthly income of approximately 6,000 yuan (around $830), their financial stability remains precarious.

At the recent Central Economic Work Conference held on December 10-11, 2023, under the leadership of President Xi Jinping, officials acknowledged the need to address the issues faced by flexible workers. Discussions included the promotion of social insurance enrollment for those in new forms of employment. This initiative comes in light of concerns regarding the high level of unemployment among young people aged 16 to 24, particularly those who are not currently enrolled in educational institutions.

The challenges of the gig economy extend beyond financial instability. The appreciation of the yuan and persistent deflationary pressures contribute to a complex economic landscape. As Hong notes, the potential for job loss or illness could leave many workers vulnerable, lacking the necessary safeguards that social security systems provide.

A Beijing delivery driver, identified as Qin Fengjun, shared his perspective on the matter, stating that earning 10,000 yuan (approximately $1,400) through gig work is meaningless without social security. “If I lose my job or get sick, I am left with nothing,” he explained.

As China’s economic authorities consider strategies for long-term growth, it is crucial to proactively address the vulnerabilities of a large segment of the workforce that currently operates outside traditional employment structures. The government’s ability to integrate these workers into a social safety net will be vital in ensuring sustainable economic development and mitigating risks associated with an increasingly flexible labor market.