Case Study: The State of China’s Gig Economy

Overview

China’s gig economy has grown into a massive sector worth 3.4 trillion yuan (as of 2020), employing approximately 200 million workers across delivery services, ride-hailing, courier services, and freight transport. Despite its scale, the sector faces systemic challenges that threaten both worker welfare and social stability.

Key Stakeholder: Mr. Qu Yong’s Story

Mr. Qu Yong, a 27-year-old auto shop attendant in Chongqing, represents the face of China’s evolving workforce. Facing reduced hours and no permanent position at his traditional job, he began delivery work as a side hustle in 2025. The government’s increased attention to gig worker protections has given him confidence to consider transitioning to full-time platform work, with plans to relocate to Shenzhen or Guangzhou in 2026 for better opportunities.

His perspective reveals a critical shift: “The traditional job models in China are increasingly outdated, and bad practices such as making use of informal and cheap labour without providing basic benefits to workers remain too entrenched among employers. Working for platform companies seems overall to be a better option to secure my future.”

Current Problems

1. Financial Burden

• Gig workers classified as self-employed must bear both employer and employee portions of social insurance
• Total cost: approximately 30% of base income
• This excessive burden significantly inhibits participation in insurance schemes

2. Low Insurance Coverage

• Only 70.57 million flexible workers participate in basic old-age insurance (end-2024)
• Even fewer—66.16 million—have medical insurance
• This leaves over 130 million gig workers without adequate pension or healthcare protection

3. Legal Gap

• Current labor laws designed for traditional employment don’t fit platform work models
• Complex workforce structures and long employment chains make responsibility unclear
• Companies exploit these gaps to evade legal obligations

4. Income Instability

• Workers face unpredictable earnings
• No guaranteed minimum wage or protections against algorithmic management
• Vulnerable to platform policy changes and market fluctuations

Outlook: China’s Path Forward

Short-Term (1-3 Years)

Based on expert analysis from Assistant Professor Liu Xiangqing at Xi’an-Jiaotong Liverpool University, China is expected to implement several immediate reforms:

• Expanded occupational injury insurance coverage for platform workers
• Clearer definitions of flexible worker status to prevent misclassification
• Pilot programs testing new insurance models in major cities
• Increased enforcement against companies evading responsibilities

Medium-Term (3-5 Years)

• Independent legislation specifically governing flexible employment relationships
• Reformed insurance contribution models that reduce the burden on individual workers
• Platform accountability frameworks clarifying company responsibilities
• Portable benefits systems allowing workers to maintain coverage across platforms and cities

Long-Term Vision

• Comprehensive Healthcare Security Law passage, enabling gig workers to access insurance in their working cities rather than registered hometowns
• Three-tier worker classification system distinguishing employees, platform workers, and self-employed individuals
• Integrated social safety net providing retirement, healthcare, unemployment, and injury protection
• Algorithmic transparency requirements ensuring fair work allocation and compensation

Strategic Significance

As Professor Liu notes, protecting gig workers is crucial for three national priorities:

1. Raising household income to boost domestic consumption
2. Promoting social stability by ensuring worker security
3. Modernizing labor relations to match economic transformation

Proposed Solutions

1. Legislative Framework Reform

Create Independent Flexible Employment Law

• Draft legislation specifically designed for platform work relationships
• Establish clear definitions distinguishing platform workers from employees and self-employed
• Set mandatory minimum protections while preserving flexibility
• Include enforcement mechanisms with meaningful penalties for violations

Update Existing Labor Codes

• Close gaps that companies exploit to avoid responsibilities
• Clarify how traditional labor protections apply to platform work
• Simplify responsibility attribution in multi-party employment chains

2. Insurance System Restructuring

Introduce Shared-Cost Model

• Platform companies contribute to worker insurance premiums
• Reduce individual worker burden from 30% to 15-20% of base income
• Implement tiered contribution based on platform revenue and worker hours

Create Portable Benefits System

• Workers maintain insurance coverage when switching platforms
• Contributions follow workers rather than being tied to single employer
• Unified digital platform tracking contributions across multiple gigs

Expand Coverage Accessibility

• Allow enrollment in working city rather than only registered hometown
• Simplify application processes through integrated digital systems
• Provide subsidies for low-income gig workers

3. Platform Company Accountability

Establish Minimum Standards

• Guaranteed minimum hourly rates adjusted for regional costs
• Mandatory rest periods and maximum work hours
• Transparent algorithmic management with appeal mechanisms
• Protection against arbitrary deactivation

Require Transparent Reporting

• Regular disclosure of worker earnings distributions
• Safety incident reporting and response protocols
• Algorithm audits for fairness and bias

Create Joint Liability Framework

• Multiple parties in employment chain share responsibility
• Clear accountability when workers are injured or unpaid
• Mandatory dispute resolution mechanisms

4. Worker Support Infrastructure

Digital Integration Platform

• Centralized system for managing benefits across multiple platforms
• Real-time tracking of hours worked and contributions made
• Simplified access to healthcare, insurance, and other services

Skills Development Programs

• Training for career advancement within gig economy
• Transition support for workers moving between sectors
• Financial literacy education for managing variable income

Worker Representation

• Establish consultation mechanisms for policy input
• Create platform-specific worker committees
• Enable collective bargaining on certain working conditions

5. Pilot Program Approach

Test in Major Cities First

• Launch comprehensive reforms in Shenzhen, Guangzhou, Shanghai, Beijing
• Compare different models (insurance structures, enforcement approaches)
• Gather data on effectiveness and worker satisfaction
• Refine policies before national rollout

Singapore’s Impact: The Model China is Studying

The Platform Workers Act

Singapore’s groundbreaking legislation, implemented in January 2025, created a distinct legal category for platform workers—positioned between employees and the self-employed. This innovative approach provides a template that Chinese lawmakers are actively studying.

Key Features China is Examining:

1. Clear Legal Status – Platform workers have defined rights without being classified as full employees
2. Work Injury Compensation – Mandatory coverage protecting workers during platform activities
3. CPF Contributions – Gradual implementation of retirement savings requirements
4. Representation Rights – Workers can form associations and collectively negotiate
5. Dispute Resolution – Accessible mechanisms for resolving conflicts with platforms

Why Singapore’s Model Appeals to China

Pragmatic Balance

• Maintains platform flexibility while ensuring basic protections
• Doesn’t impose full employment overhead on platforms
• Creates sustainable model for platform economy growth

Proven Effectiveness

• Demonstrated that worker protections and platform viability can coexist
• Provides real-world data on implementation challenges and solutions
• Shows how to adapt traditional labor concepts to modern work arrangements

Regional Relevance

• Asian context with similar urban density and platform economy scale
• Comparable concerns about social stability and worker welfare
• Shared emphasis on gradual, pragmatic policy implementation

Specific Influences on Chinese Policy

Mr. Guo Shuqing’s Endorsement The vice-chairman of the National People’s Congress Financial and Economic Affairs Committee explicitly cited Singapore’s Platform Workers Act during legislative deliberations, stating: “China could follow Singapore’s example of enacting a Platform Workers Act – which seeks to protect the rights of workers in the gig economy – to address the legal gap in China.”

Three-Category Classification China is likely to adopt Singapore’s approach of creating a distinct middle category rather than forcing platform workers into existing employee/self-employed classifications. This preserves platform business models while extending necessary protections.

Phased Implementation Following Singapore’s gradual rollout strategy, China appears positioned to introduce protections incrementally rather than comprehensive reform overnight, allowing time for adjustment and refinement.

Beyond Singapore: China’s Unique Challenges

While Singapore provides inspiration, China must adapt the model to its distinct circumstances:

Scale Difference

• Singapore: Approximately 70,000-100,000 platform workers
• China: 200 million gig workers
• Implementation complexity increases exponentially with scale

Regional Disparities

• China’s vast geography creates different economic conditions across regions
• Insurance and protection costs vary dramatically between cities
• Hukou (household registration) system adds complexity Singapore doesn’t face

Platform Ecosystem

• China’s platforms are more diverse and deeply integrated into daily life
• Different regulatory approach to tech companies than Singapore
• Greater emphasis on social stability and Communist Party priorities

Long-Term Singapore Influence

China’s interest in Singapore’s model signals several important trends:

1. International Policy Learning – China increasingly looks to successful regional models rather than only domestic experimentation
2. Worker-Centric Evolution – Recognition that sustainable platform economy requires worker welfare
3. Legislative Innovation – Willingness to create new legal categories rather than force-fit existing frameworks
4. Measured Reform – Preference for tested approaches over radical experimentation

The Singapore model demonstrates that protecting gig workers doesn’t require destroying the platform economy—a reassurance crucial for Chinese policymakers balancing multiple priorities. As China develops its own framework over the coming years, Singapore’s experience will likely continue informing specific provisions around insurance, dispute resolution, and platform responsibilities.

Conclusion

China stands at a critical juncture in gig economy regulation. With 200 million workers depending on platform employment and traditional job models proving increasingly inadequate, comprehensive reform is both necessary and inevitable.

The State Council’s December 2025 report and subsequent NPC deliberations represent more than policy discussions—they signal recognition that gig worker protection is essential for economic growth, social stability, and the modernization of China’s labor system.

By learning from Singapore’s Platform Workers Act while adapting solutions to China’s unique scale and circumstances, policymakers have an opportunity to create a model that balances platform innovation with worker security. Success will require coordinated action across legislation, insurance reform, platform accountability, and worker support infrastructure.

For workers like Mr. Qu Yong, these reforms could mean the difference between precarious survival and genuine economic security—transforming gig work from a desperate alternative into a viable path forward in China’s evolving economy.