China's Unemployment Crisis in 2025 | Generated by AI
China’s unemployment challenges in 2025, contrasted with lower unemployment a decade ago in 2015, stem from a combination of structural, economic, and social factors that have intensified in recent years. Below, I’ll break down the key reasons for rising unemployment, the proliferation of gig economy jobs like delivery and ride-hailing, and the perception of an economic collapse, while comparing the situation to 2015. I’ll also address why these gig jobs haven’t fully absorbed the unemployed and why the economy feels strained.
1. Economic Context: 2015 vs. 2025
In 2015, China’s economy was growing at around 6.9%, driven by robust manufacturing, real estate, and export-led growth. The labor market was relatively tight, with an official urban unemployment rate around 4.1%. The gig economy was emerging but not yet dominant, and traditional sectors like manufacturing and construction absorbed much of the workforce, including migrant workers. The economy benefited from post-2008 stimulus measures, rapid urbanization, and global demand for Chinese goods.
By 2025, China’s economic growth has slowed significantly, with GDP growth reported at 4.6% in Q3 2024, down from pre-COVID levels. The economy faces multiple headwinds: a protracted property crisis, declining consumer spending, and weaker global demand. These factors have led to higher unemployment, particularly among youth (16.1% in November 2024, down from 18.8% in August 2024), and a sense of economic stagnation.
2. Why Unemployment Has Risen
Several structural and cyclical factors have contributed to higher unemployment in 2025 compared to 2015:
-
Property Market Collapse: The real estate sector, a major driver of growth in 2015, has been in crisis since 2020, with developers like Evergrande defaulting and foreclosures spiking (800,000 properties in 2023). This has led to job losses in construction, real estate, and related industries, which previously employed millions, including young workers and migrants.
-
Manufacturing Slowdown: Traditional manufacturing, a backbone of employment in 2015, has contracted due to automation, overcapacity, and reduced global demand. The shift to a knowledge-based digital economy has left many low-skill workers jobless, as factories close or downsize.
-
Youth Unemployment and Education Mismatch: In 2025, youth unemployment remains high (16.1% in November 2024), driven by a surge in college graduates (over 11 million annually) entering a job market with fewer white-collar opportunities. Many graduates lack technical skills demanded by employers, and the proliferation of private universities (minban daxue) has led to a perception of “devalued” degrees. In 2015, the graduate supply was smaller, and economic growth created more entry-level jobs.
-
Post-COVID Economic Scarring: The COVID-19 pandemic (2020–2022) disrupted industries, with lockdowns causing layoffs in manufacturing, retail, and services. After restrictions lifted in late 2022, the expected economic rebound was weak, leaving many workers, like former construction worker Sun in Changsha, unemployed or underemployed.
-
Government Policy Shifts: Regulatory crackdowns on tech and tutoring industries since 2020 have curtailed job creation in sectors that were booming in 2015. For example, the tutoring industry, once a major employer of graduates, was decimated by 2021 regulations.
3. Rise of Gig Economy Jobs (Delivery, Didi, etc.)
The gig economy, including food delivery (e.g., Meituan, Ele.me) and ride-hailing (e.g., Didi), has exploded, with over 200 million workers (25% of the workforce) engaged in gig roles by 2024. However, these jobs haven’t fully addressed unemployment for several reasons:
-
Oversupply of Workers: The influx of unemployed workers, including laid-off factory workers and graduates, has flooded gig platforms, reducing bargaining power and wages. For example, delivery workers’ average monthly pay dropped from over $1,000 in 2018 to $956 in 2023, despite longer hours. In 2015, gig work was less common, and higher wages attracted fewer workers.
-
Low Pay and Harsh Conditions: Delivery drivers earn as little as 7 yuan ($1) per delivery, often working 10–15 hours daily to make ends meet. Didi drivers face commissions as high as 50%, cutting into earnings. These jobs are physically demanding, with risks like traffic accidents and minimal labor protections, making them unattractive to many.
-
Algorithmic Exploitation: Platforms use algorithms to impose tight delivery windows and penalties for low ratings, increasing stress and reducing income stability. Workers like Ms. Liu, a 48-year-old delivery driver, face pressure to meet unrealistic targets, with little room for breaks or injuries. In 2015, the gig economy was smaller, and platforms offered better incentives to attract workers.
-
Involution and Competition: The term “involution” describes the intense competition in low-skill gig jobs, where workers toil harder for diminishing returns. This is a stark contrast to 2015, when gig work was seen as a flexible, high-income option for migrants.
-
Educated Workers in Low-Skill Jobs: Reports suggest credible estimates of 70,000 master’s degree holders working as delivery drivers, reflecting a lack of suitable jobs for educated youth. In 2015, fewer graduates turned to such roles, as white-collar opportunities were more abundant.
4. Why the Economy Feels Like It’s Collapsing
While China’s economy hasn’t collapsed, the perception of decline stems from several factors:
-
Slower Growth and Consumer Confidence: GDP growth of 4.6% in 2024 is below the 6–7% of the mid-2010s, signaling a “new normal” of slower expansion. Weak consumer spending, driven by fears of deflation and falling asset prices (e.g., property), has reduced demand for goods and services, impacting job creation.
-
Property Crisis: The real estate slump has ripple effects, reducing wealth for homeowners and slowing construction, a key employer in 2015.
-
Deflationary Pressures: Posts on X highlight fears of deflation, with falling prices and high debt levels discouraging consumption. This contrasts with 2015, when inflation was moderate and consumer confidence was higher.
-
Structural Challenges: An aging population and shrinking workforce, noted in X posts, reduce labor demand. Automation and robotization, while compensating for labor shortages, displace low-skill workers. In 2015, China’s working-age population was still growing, supporting labor-intensive industries.
-
Social Sentiment: Stories of unemployed graduates, overworked delivery drivers, and unpaid wages fuel public frustration, amplified on platforms like Douyin. In 2015, optimism about China’s rise masked structural issues.
5. Comparison: Delivery and Didi Jobs in 2015 vs. 2025
-
2015: The food delivery market was worth $3.4 billion, and ride-hailing was nascent. Workers earned higher wages (e.g., $1,000+/month for delivery), and competition was lower. Gig work was a choice for flexibility, not a necessity. Traditional sectors like manufacturing and construction provided ample jobs.
-
2025: The food delivery market is worth $208 billion, and ride-hailing exceeds $50 billion. However, an oversupply of workers (12 million delivery drivers, 6.6 million Didi drivers) and algorithmic control have slashed earnings and worsened conditions. Many workers, including graduates, take these jobs out of desperation, unlike in 2015 when they were supplementary.
6. Government Response and Outlook
The Chinese government aims to create 12 million urban jobs in 2025, focusing on preventing poverty relapse among migrant workers. However, structural issues like the hukou system, which limits rural migrants’ access to urban benefits, and a lack of labor protections in the gig economy persist. In 2015, government stimulus and infrastructure spending buoyed employment, but today’s fiscal constraints limit such measures.
Conclusion
The rise in unemployment in 2025 compared to 2015 reflects a slowing economy, a property crisis, manufacturing decline, and a mismatch between graduate skills and job opportunities. While gig jobs like food delivery and Didi driving have absorbed some workers, their low pay, harsh conditions, and oversaturation make them a poor substitute for stable employment. The perception of economic collapse stems from slower growth, deflationary fears, and social discontent, contrasting with the optimism of 2015. Addressing these challenges requires tackling structural issues, improving labor protections, and fostering new growth sectors.
If you want a deeper dive into any specific aspect (e.g., gig economy conditions or policy responses), let me know!