China’s economic indicators in various sectors have deteriorated significantly, prompting the government to encourage increased consumption among the population to stimulate the economy. However, with a surge in temporary gig workers, domestic consumption in China is only facing further suppression.
In November, China’s economic growth momentum slowed down across the board, with consumer spending significantly weakening, and investment and real estate sectors showing signs of fatigue. Retail sales growth hit its lowest level since the outbreak of the pandemic.
As traditional job-creating industries like real estate face crises or downturns, more and more individuals are finding themselves compelled to join the food delivery service industry. These jobs are often physically demanding, risky, and offer unstable income.
According to the Wall Street Journal, 35-year-old food delivery worker Xu Hui, who used to work as a barber in his hometown, found himself in this line of work after his shop was demolished. He worked seasonally at a factory, including one that produced iPhones, before opting for food delivery. He now works 13 to 14 hours a day, seven days a week, sharing a humble room with another delivery worker.
Xu Hui mentioned that a part of his monthly income goes towards paying debts, while the majority is sent back home to his wife and children. He expressed that sustaining such physically demanding work long-term is challenging, and if given a better opportunity, he would take it. Yet, he hasn’t found one yet.
“I’m not even sure what I’ll be doing six months from now,” he said.
Food delivery work can also be dangerous, with minimal health or other benefits and low job security. Official media reports stated that in 2023, there were around 12,000 traffic accidents involving food delivery workers, averaging around 33 incidents daily.
37-year-old northeastern man Wu Di shared with the Wall Street Journal that he had experienced three traffic accidents himself, while three of his colleagues at the delivery station died due to workplace accidents.
The pressure on food delivery workers is immense. Their every move is monitored by delivery apps, which may impose fines or other penalties if orders are not delivered on time. Equipped with a “smart” helmet with integrated Bluetooth earphones, the app continuously sends alerts and warnings to the workers during their shifts.
The Wall Street Journal noted that Xu Hui is just one inconspicuous figure in the gig economy, which has now become one of the largest labor forces in China. China is gradually transforming into a gig economy country, with around 200 million people currently engaged in gig work and this number continues to grow.
Researchers state that the rapid growth of gig work (including self-employment, food delivery, ride-hailing, and live-streaming e-commerce) signifies that the Chinese economy has failed to create enough quality job opportunities in offices or other professional environments.
Industries that provided significant employment opportunities a few years ago, like real estate and education, are now in decline following the burst of the real estate bubble and Beijing’s regulatory crackdown on the private sector. This shift has led to more individuals turning to part-time or informal work. Gavekal Dragonomics data indicates that freelancers now constitute about 30% of China’s non-agricultural workforce, up from 20% in 2013.
The economic downturn has made job hunting more difficult, with China’s youth unemployment rate nearing 20%. Increasingly, young graduates are finding their first jobs not in offices but on food delivery platforms.
Official data from the Chinese government reveals that in the four years leading up to 2024, the number of ride-hailing drivers in China doubled to 7.5 million, while ride-hailing orders only increased by approximately 60% during the same period. Due to intense competition, many Chinese cities have advised job seekers to avoid entering this industry this year.
According to a report by Hua Ri, Gerard DiPippo, deputy director of Rand Corporation’s China Research Center, analyzed and noted that the current rate of employment growth is significantly lower than pre-pandemic levels.
Unemployed individuals from other industries in China or those unable to find full-time work are now competing for gig jobs, putting downward pressure on gig wage levels.
“We are seeing near saturation in this kind of labor supply,” Ernan Cui, analyst at Gavekal Dragonomics, told Hua Ri, stating that the rapid growth of gig labor over the past two to three years has further exacerbated this trend.
As China’s reliance on the gig economy deepens, economists believe that the difficulty laborers face in securing stable incomes will dampen consumption. This trend also threatens China’s pension system in the future as many gig workers do not contribute to pension insurance. This will lead to added strain on the pension system when these workers reach old age.
In an environment of unstable employment, Chinese consumers are holding onto their wallets. Retailers have reported decreased foot traffic in many malls, with consumers delaying purchases of non-essential goods.
The International Monetary Fund (IMF) has cautioned that China’s heavy reliance on investment and exports rather than household consumption may hinder its long-term growth.