Market Update: How China’s growing gig economy has left a generation adrift – Full Analysis

FOR all of December, Li Yun spent her weekends pretending to be a dentist or a flight attendant. She wasn’t an actor, nor was she beginning a career in medicine or aviation. She was working as a non-player character, or NPC, at a children’s career experience centre, earning 100 yuan (S$18.53) a day.

Li graduated from university in 2025 with a double major in primary school education and literature. But in a sputtering economy with shrinking corporate headcounts, she has become a face of China’s new economic reality: the “flexible worker.”

“Flexible employment” has become a catch-all term in China’s labour market. Under current standards, it covers almost anyone working more than one hour a week for pay without a standard full-time labour contract. This includes freelancers, platform-based gig workers, and traditional odd-job labourers.

While official data on the scale of this workforce has historically been sparse, the government is beginning to acknowledge the magnitude of the shift.

In December 2025, during a report to the National People’s Congress Standing Committee, Vice Minister of Human Resources and Social Security Wu Xiuzhang stated: “According to estimates, the scale of flexible employment personnel in our country has exceeded 200 million.”

Even at this conservative estimate, this group accounts for 27 per cent of China’s total employed population of 740 million, and nearly 43 per cent of the 470 million urban workforce.

While typical narratives focus on the freedom supplied by the gig economy, many of these workers lack a steady income, social safety net benefits and a clear career path.

Along with Li, Luo Yi and Wen Yu are also all university grads working the gig economy. In the years since graduation, they have taken jobs requiring them to make 100 cups of coffee in two hours or snap 1,500 photos in three hours. Pay for a two-hour stint ranges from just over 20 yuan to 1,000 yuan.

This precarity is the hallmark of an economic shift driven by employers who now favour flexible contracts to cut costs and transfer risk, forcing individuals to go it alone. Some scholars predict that flexible workers will eventually make up 60 per cent of the total workforce in China.

The trend has exposed a critical gap in the social safety net, as insurance models built for traditional employment are prohibitively expensive for freelancers. In response, some people in this new generation of workers are adapting by letting go of traditional career goals, instead forging a mindset of self-reliance to navigate their future.

Who’s gigging?

The size of China’s flexible workforce is vast. By the end of 2024, the number of gig workers reached about 240 million, according to data cited by the state-run Consumer Daily newspaper.

A report by Jinan University and online recruitment site Zhaopin showed that flexible job seekers accounted for 36.4 per cent of all applicants on the platform in 2024.

Crucially, gig jobs are no longer the landing spot for just blue-collar workers. More than 16 per cent of university graduates from the classes of 2020 and 2021 have worked in the gig economy, according to data from the National Higher Education Student Information and Career Center.

In the first eight months after Li graduated in 2025, she has worked as an assistant at an anime convention, a KFC employee, and a copywriter for a matchmaking company, along with her stint as an NPC, which was her longest gig. The shortest time she spent at a job was at KFC, which lasted a single morning.

With zero fast food experience, she was thrown onto the cooking line after a single demonstration. She fumbled with hot fryer baskets and four types of sandwiches, all in hope of passing a three-day unpaid trial that would win her a job that paid 10.5 yuan an hour. She quit within a day, walking away with little more than a burn on her right thumb.

Li had studied education and literature in Hubei. She tried to get a teaching job right out of school, but with only two local teaching positions available for 120 graduates, she failed to secure a position before graduation. When she got out of school, she registered as unemployed.

Li is one of the approximately 12.22 million people who graduated from college in 2025. Due to a slowing economy, many have found themselves with no other choice than the gig economy. This can be seen in the official data. In August, the unemployment rate for people aged 16 to 24 – not including students – hit 18.9 per cent.

Still, for some young people, flexible employment is a choice. Luo, who graduated in the 2024, turned down a prestigious offer from a top internet company’s gaming division. It was a coveted job that drew 2,000 application. But during her pre-graduation internship, she realised the toll it would take.

Sitting for 10 hours a day, Luo Yi developed severe back pain and numbness in her hands. “I felt it was overtaxing on my body,” Luo said.

She realised she did not accept the work culture at the company. “In the absence of creativity, you feel that many of the things you do are meaningless, yet you have to sacrifice your time, energy and body to do them,” she said.

Recent surveys have suggested that the preferences of young Chinese are shifting toward greater leisure and independence. For older workers, however, the shift is often less voluntary.

A 2025 study by the Center for Research on New Employment Forms found that 77 per cent of ride-hailing drivers got into gig work because they were unemployed. For the middle-aged demographic, flexible work often serves as a place to land after being squeezed out of construction, manufacturing or traditional corporate jobs.

Going it alone

While flexible employment offers autonomy, it strips away the benefits that come with working full time at a company. In Zhaopin’s 2024 Employment Relationship Trend Report, 54.1 per cent of flexible workers surveyed cited “unstable income” as a top challenge, and 41.7 per cent mentioned the “lack of basic guarantees.”

“You have to make choices entirely based on your own judgment, not knowing the consequences, which brings a huge sense of uncertainty and confusion,” said Yang Peng, a freelance teacher of Chinese as a foreign language. He said he earns about 3,500 yuan a month.

Other young people echo Yang’s view. Luo described conventional jobs as having a company to lean on, whereas flexible employment is “fighting alone.”

Some have done well for themselves on their own. Wen Yu is a photographer who specialises in weddings and graduation portraits. She said she can make more than 30,000 yuan a month during peak times. When family members urged her to find steady work, she rejected their advice.

“I earn more from photography than from going to work” she told them.

Still, Wen admitted that her path is gruelling. She suffers from a lumbar disc herniation — an occupational hazard of carrying heavy gear — and noted that the market was volatile in 2025. “Everyone says the photography market is difficult this year because budgets are reduced,” Wen said.

Without a company to lean on, risks fall on the individual. British economist Guy Standing coined the term “the precariat” to describe this class – workers facing unstable work and living conditions that lead to chronic anxiety.

In China, this is visible in the Internet platform economy. A 2024 study of blue-collar workers showed an enormous disparity in the livestreaming business, where the top 0.25 per cent of streamers take 90 per cent of the income, while 93 per cent earn less than 3,000 yuan a month.

The employers’ calculus

The rise of gig economy isn’t just about supply. It is about a fundamental shift in demand. Companies, facing shorter lifespans and thinner margins, are turning away from standard employment. “The current mindset is to issue tasks to the market, not positions,” said Zhang Chenggang, director of the Center for Research on New Employment Forms.

Feng Xiliang, a professor at Capital University of Economics and Business, noted that one top catering chain he studied moved from 100 per cent standard employment contracts in 2021 to 30 per cent gig-based employment by 2024.

Technology companies are also replacing older, expensive staff with cheaper, younger outsourced workers. Wu Yu, a 45-year-old tech worker, was the first in her department to be laid off in late 2023, despite recently receiving stock options for excellent performance.

The company signalled a need to “rejuvenate” the team. Following such layoffs, reliance on outsourcing increases. In some divisions of the internet giants, such as content moderation, outsourced staff now make up to 70 per cent of the workforce.

According to the China Flexible Employment Development Report in 2022, more than 61 per cent of Chinese companies were using flexible labor in 2021, a figure that has likely grown.

This “gig-ification” is reaching into skilled sectors. Nearly 29 per cent of firms now use flexible labor for professional roles, such as those in finance, legal services and information technology.

The safety net gap

The most pressing systemic failure is in the social safety net. Currently, the cost of China’s social insurance premiums is equal to about 35 per cent of a standard employee’s wages, a cost usually shared between the employer and employee. For freelancers, bearing the cost alone is prohibitive.

“With current incomes already stretched, people are not particularly willing to pay 40 per cent to deal with future risks,” one expert said.

A survey of Meituan delivery riders found that nearly a quarter would refuse to pay for social safety net benefits if it came out of their pocket. Those who were willing to pay mostly wanted the contribution capped at 5 per cent of their wages.

The government is attempting to patch the holes. The Ministry of Human Resources has launched pilots for occupational injury protection for platform workers, covering 23 million people as of late 2025. However, pension and medical insurance coverage remains a challenge.

Change is contentious. Chang Kai, a prominent labour law scholar, argued that platform workers must be recognized as employees under labour law to stop the trend of shifting away from direct employment.

Others, like Zhang Chenggang, argued that the industrial-era labor law is ill-suited for the digital age. “Standard employment has only existed for 200 years and is in the process of disintegrating,” Zhang said.

The solution, some experts suggested, lies in decoupling social security from employment relationships entirely – shifting the burden toward the government.

Adapting to the ‘wilderness’

For the younger generation, waiting for policy fixes is not an option. “Finding a job is a social problem caused by multiple factors,” said Wang Jiaying, a mental health lecturer at Nanjing Normal University. She advised stripping away the shame of unemployment.

Many young workers mention “taking off the long gown of Kong Yiji” – a reference to a fictional scholar who clung to his status symbol despite being destitute. It is a metaphor for shedding the expectations of elite employment.

Chen Wan, a postgraduate in design, now works at a bookstore and a coffee shop after three “failed” corporate stints.

She hides her bookstore job from successful friends. Yet, there is resilience. Li, who burned her thumb at KFC, found meaning in her role as a pretend dentist when a child told her, “I want to help people fix the bad things in their mouths.”

It reignited her interest in teaching. She is now preparing for the teacher certification exam. Luo, who rejected the big tech offer, has started a cross-border e-commerce venture. She quoted a popular internet saying: “Life is a wilderness, not a track.” CAIXIN GLOBAL