China’s internet platforms proved a safety net for young workers amid record unemployment and a Big Tech crackdown

Big Tech firms from Tencent to ByteDance helped create millions of vloggers, content writers and e-commerce sellers amid a slow pandemic-stricken economy
Most new platform economy jobs are performed by those under 35, as China’s youth unemployment has climbed to record highs

Internet

Ben Jiangin Beijing

Published: 8:00pm, 29 May 2023

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Chinese digital platforms proved to be a vital safety net throughout the Covid-19 pandemic for their youngest workers, according to a report by the state-backed China Academy of Labour and Social Security (CALSS), as youth unemployment was climbing to its highest levels on record and Beijing was waging a wide-ranging industry crackdown.

From part-time vloggers and content writers to online shop owners, an increasing number of people in the country’s youngest generation have taken to digital platforms from the likes of tech behemoths Tencent Holdings and ByteDance in search of job opportunities, according to the report published last week.

Tencent’s ubiquitous messaging app WeChat alone helped create more than 50 million employment opportunities last year, according to the report, which defined these as paid stints within the platform’s ecosystem, including public accounts, video channels and its large catalogue of mini programs.

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More than half – 56.8 per cent – of those jobs were performed by those under 35 years old, according to the report, showing how younger Chinese Millennials and Gen Z workers have become a major force in the platform economy as employment opportunities have dimmed in other sectors amid a slow economic recovery since China lifted its stringent Covid-related restrictions this year.

More than 60 per cent of the surveyed part-time workers on digital platforms expressed interest in switching to full-time roles in those professions. Another 30 per cent said they were willing to turn those gigs into lifelong careers because they value the “flexibility and potential for self-actualisation” that such jobs offered, according to the report.

The CALSS findings align with recent findings from the China Information Economics Society (CIES), a think tank.

China’s internet platform companies – which include the operators of apps for everything from social media and video gaming to e-commerce and food delivery – generated more than 240 million jobs for 27 per cent of the working-age population in 2021, according to a note from CIES.

These companies have played a pivotal role in stabilising the job market, the CIES concluded.

A Didi Chuxing driver on the job in Beijing on August 28, 2018. Photo: Reuters

The reports stand in stark contrast with accusations levelled at Big Tech firms throughout much of the pandemic, when there were a slate of antitrust investigations and fines against companies including Meituan and Alibaba Group Holding, owner of the South China Morning Post, which were fined hundreds of millions of dollars in Beijing’s pursuit of curbing the “disorderly expansion of capital”. Crackdowns also included new data and cybersecurity regulations.

The one-two punch of regulatory crackdowns and a slowing economy during the pandemic led to many Big Tech firms shedding tens of thousands of jobs in recent quarters, even as pressure began to let up late last year as Beijing started to prioritise growth.

At the Central Economic Work Conference held on December 15 and 16 in Beijing last year, Chinese President Xi Jinping pledged to support platform companies to “fully display their capabilities” in bolstering economic growth and job creation.

The jobless rate for people aged 16 to 24 hit a record high of 20.4 per cent last month, according to the National Bureau of Statistics, with 11.6 million college graduates set to enter the workforce later this year.

China already has about 200 million workers in flexible employment or without long-term contracts, according to official data. These include gig economy work like the on-demand jobs offered on platforms such as Meituan and ride-hailing giant Didi Chuxing.

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While digital platforms can offer flexibility and short-term relief, they also bring new challenges. They may not provide the same welfare and social security benefits offered by full-time contracts, said Zhang Yi, founder and chief analyst at market consultancy iiMedia.

Long-term development challenges could also be hampered by a range of issues including “service quality, intellectual property ownership, data privacy and labour disputes”, Zhang added.

As unemployment rises in other sectors, the platform economy also becomes more saturated.

China had 5.1 million registered online taxi drivers at the end of last year, a 76 per cent increase from 2.9 million drivers in 2020, according to the country’s transport ministry. The number of passengers grew just 20 per cent in the same span, to 437 million last year from 365 million in 2020, according to the China Internet Network Information Centre.

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