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He Huifeng

The air carried a chill in Hengdian, one of China’s best-known hubs for drama and film production. Yu Shutian, a 30-year-old actress, was on her way to set at 3.30am, donned in a floral shirt and darkened make-up to play a rural villain.
Referred to as “China’s Hollywood”, Hengdian – located in the eastern province of Zhejiang – has become an activity centre for the country’s fast-growing micro-drama industry, which produces low-budget, vertically-shot series designed for smartphones.
With frequent travel and short rest times an inescapable part of her daily routine, Yu carries a pervasive anxiety about survival.
“In an era where small actors can be quietly replaced at any moment by [artificial intelligence], having work is a form of salvation,” she said.
In pure macroeconomic terms, Yu – who holds a master’s degree in directing from the University of Sussex – is just one of China’s more than 200 million gig-economy workers. In addition to the spectre of AI, many must deal with unstable income and a relative lack of social security protections.
Underscoring a broader structural shift in China’s labour market, the gig economy – ride-hailing drivers, food delivery couriers, digital content creators and many other positions – has so far evolved from a side hustle into a vast reservoir absorbing the country’s unemployment pressures and helping to maintain economic stability.
Yu’s job, which involves so much intercity travel for auditions she typically sleeps four or five hours a night, has become her lifeline amid China’s cooling job market and the impact of AI.
But the exhaustion is a secondary concern compared with the uncertainty of the market. “Just being cast helps ease the anxiety,” she said.

China’s micro-drama industry is now moving beyond its early phase of chaotic expansion into a fiercely competitive and crowded market, one that is now, like many other sectors, facing disruptions from AI. Room for newcomers has shrunk rapidly.
In recent years, the industry’s low barriers to entry and rapid production cycles made it an important fallback option for unemployed young people, mainstream film workers out of a job, and even fresh graduates. But AI-generated productions are now upending that model.
As of 2024, the number of flexibly employed people in China exceeded 240 million, according to a report by People’s Tribune, a magazine affiliated with People’s Daily, the official newspaper of the ruling Communist Party.
By that time, the number of food delivery riders nationwide had surpassed 10 million and the number of professional live streamers had reached 38.8 million, it said, citing figures from the National Bureau of Statistics (NBS).
More recent data places the figure even higher. State-owned business news outlet Yicai said in a report on Thursday the country had 280 million flexibly employed workers in 2025 and projected that number to reach 320 million this year, citing statistics from the China New Employment Research Centre. If accurate, the estimate for 2026 would represent more than 40 per cent of urban employment.
As the country’s manufacturing and white-collar sectors shed workers during a cyclical slowdown, its flexible workforce – typically a resilient stopgap against negative economic trends – is coming under pressure from both technological displacement and a labour oversupply.
According to official data, youth urban unemployment remains high. In April, the NBS reported a 16.3 per cent jobless rate for people aged 16 to 24 and 7.4 per cent for the 25 to 29 age group, both excluding students.
The expanding role of the gig economy as a labour “reservoir” has alarmed some economists. Li Shi, dean of the Institute for Common Prosperity and Development at Zhejiang University, noted the gig workforce had effectively replaced rural villages as the country’s main urban employment buffer – those who previously returned to their hometowns if unable to find work are now staying in cities to seek temporary positions.
But if workers trapped in the gig economy cannot transition back into stable employment, he warned, China risks deepening “employment polarisation”, where stable middle-income jobs shrink while workers become concentrated in either high-skilled or precarious low-paid work, prolonging weaknesses in the country’s household consumption.
“The employment situation is severe. Flexible employment and new employment groups are expanding, but unstable job expectations among them create a new form of pressure,” Li said in a January interview with Caijing magazine.


Zheng Bingwen, director of the World Social Security Research Centre under the Chinese Academy of Social Sciences, also emphasised that while the gig economy absorbed roughly 27 per cent of China’s workforce, the sector’s erosion of formal employment relationships leaves workers’ social security extremely fragile.
Cited by the state-backed China Labour and Social Security News in January, Zheng called for gig workers to be incorporated into the national social security system through more flexible contribution mechanisms, warning that the labour reservoir could otherwise evolve into a systemic risk pool.
Whether micro-drama actors, ride-hailing drivers or delivery couriers, gig workers often face similar problems. These include hazy employment status, weak social welfare, algorithm-driven work pressures, limited legal recourse, difficulty integrating into cities and a growing risk of AI-driven displacement.
Those anxieties are acute for Jack Yi, a former sales manager in Guangzhou who has spent the past two years unemployed. He now drives for a ride-hailing platform.
After paying for car rentals and electricity, his income barely covers his living expenses. Yi already stopped paying roughly 1,200 yuan ($US176) in voluntary social security contributions each month, keeping only basic medical insurance.
Voluntary withdrawals from the public pension system are becoming more common among sections of China’s flexible workforce. With the country gradually raising its retirement age after recent reforms, many lower-income workers prefer to keep cash flow for immediate survival rather than cover a retirement that is decades away.
At the same time, AI is beginning to shrink the employment buffer provided by the gig economy buffer in urban areas.
Grace He, an administration manager who works at an advertising company in Guangzhou, found that after her company cut its branding department, she had to take on design work.
Despite having no professional design background, she can now use domestic AI tools to generate e-commerce graphics that previously required days of work from her formally trained ex-colleagues.
I don’t want to calculate gains and losses when it comes to my dream
Yu Shutian, actress
However, this efficiency has not led to higher pay. Instead, it has become a tool for management to cut costs and lay off more white-collar staff, pushing them towards the gig reservoir.
CICC Global Institute – a think tank under China International Capital Corporation, a partially state-owned investment bank – noted in a report released earlier this year that technological advancement and efficiency-driven cost pressures were amplifying income volatility for gig workers, leading to a steady decline in their marginal propensity to consume.
This has created a macroeconomic paradox where “increased efficiency fails to yield higher earnings”, the CICC researchers wrote. As a growing portion of the workforce faces unstable income and a lack of long-term security, they added, the more precarious workers tend to slash long-term spending on education, housing and consumer durables.
If hundreds of millions of gig workers remain outside China’s pension system over the long term, economists and officials have warned the system could face a solvency crisis in the coming decades.
In response, the State Council, China’s cabinet, in April rolled out a 12-point plan, pledging stronger labour protections for new employment groups, or gig workers.
The document calls for timely and fair wage payments, a stronger social security system, enhanced labour protections during extreme weather and greater transparency in how platforms’ algorithms allocate orders, price fees and set time limits, among other measures. The authorities set a target of ensuring labour practices were standardised across the platform economy by 2027.
Yi and Yu’s thoughts on the news were lukewarm.
“As long as they don’t take more money out of my pocket, anything is fine,” said Yi, the ride-sharing driver, echoing a common sentiment among gig workers.
There is no paid sick leave or meaningful benefits in China’s micro-drama industry, so most try to earn as much as possible while they are still young, said Yu, the actress, adding that performers often continue filming even when running a high fever.
At a wrap party in Hengdian, the production crew set off fireworks. Yu said she cherished every work opportunity, as AI cannot replicate storytelling that carried emotional texture and human imperfection.
“I don’t want to calculate gains and losses when it comes to my dream,” she said. “But honestly, if I were starting this year, I probably wouldn’t stand a chance.”


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More than 200 million people in China are flexibly employed, but AI adoption, unstable income and poor social security make positions precarious


More than 200 million people in China are flexibly employed, but AI adoption, unstable income and poor social security make positions precarious.


China’s gig economy is an employment reservoir – but is the well drying up?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}More than 200 million people in China are flexibly employed, but AI adoption, unstable income and poor social security make positions precarious

More than 200 million people in China are flexibly employed, but AI adoption, unstable income and poor social security make positions precarious