Employment is the bedrock of people's livelihoods, and its importance cannot be overstated. Looking back at history, China's reform and opening-up were driven by rural famine and urban employment pressure. Starting in 1979, educated youth sent to the countryside began returning to cities, and combined with new labor market entrants, employment became a pressing challenge. This forced a shift from sole reliance on state-owned enterprises to a multi-channel approach encompassing public, collective, and individual economies. In 1981, the Party Central Committee and State Council issued a decision on expanding employment channels, declaring that maintaining multiple economic forms and management methods long-term was a strategic decision, not a stopgap measure. Employment considerations were a major catalyst for economic system reform.

In the late 1990s, China faced another severe employment crunch. This was resolved through three main pathways: joining the WTO and producing for the world market, which absorbed vast rural surplus labor; accelerated urbanization, with construction and the tertiary sector acting as employment reservoirs; and the rise of the internet, especially e-commerce and logistics, which created numerous new job categories. In recent years, employment pressure has intensified again, with terms like gig work, layoffs, severance, and labor arbitration dominating online discussions. This June, the State Council issued a plan focusing on the employment-first strategy, aiming for high-quality and full employment through a framework of individual initiative, market regulation, government promotion, and entrepreneurship encouragement.

Similar to a previous analysis on China's consumption data, this piece aims to lay out facts based on data. This is the foundation for serious discussion and an educational exercise in itself.

How Many People Work and Where?

According to the 2025 statistical communique, out of China's 1.405 billion people (954 million urban, 451 million rural), total employment stood at 725 million by year-end. Of these, urban employment was around 475 million, and rural employment around 250 million. A well-known concept is the "migrant worker," defined as someone with rural household registration who works in non-agricultural industries locally or away from home for six months or more. At the end of 2025, there were 301 million migrant workers in total, with roughly 180 million working away from their hometowns and 121 million working locally. Subtracting local migrant workers from the 250 million rural employed population suggests roughly 129 million are engaged in pure agriculture. However, data from the Ministry of Human Resources and Social Security shows employment shares of 22.2% in primary industry, 28.4% in secondary, and 49.4% in tertiary. This implies about 161 million people work in primary industry (725 million multiplied by 22.2%). The discrepancy arises partly because local migrant workers are, by definition, in non-agricultural work, while those working away could be in farming or other sectors, with some engaged in agriculture elsewhere.

Where do people actually work? Based on a national economic report, at the end of 2023, employment was distributed as follows: 15.0% in state-owned and collective units, 35.5% in private and foreign-invested enterprises (including Hong Kong, Macau, and Taiwan), 26.4% as self-employed or freelancers, and 21.0% in rural household contract farming. These four categories account for 97.9% of the total, with the remaining 2.1% including workers in farmer cooperatives and social organizations like private schools, hospitals, and foundations. With total employment at 740 million in 2023, state-owned and collective units employed about 110 million people. Further breakdown from housing fund data puts the number of employees in government agencies and public institutions at over 48 million, excluding retirees. Medical insurance data shows 249.8 million enterprise employees, 68.9 million in government and public institutions (this figure includes retirees), and 69.8 million flexible workers.

Flexible employment has become a major focus recently. According to social insurance law, this includes self-employed individuals without employees, part-time workers not enrolled in basic pension schemes through an employer, and other flexible arrangements. Ministry guidelines define it broadly: work in informal sectors with standards below typical enterprises, self-employment (sole proprietorship or partnerships), independent work like freelancing or gig assignments, and temporary jobs such as hourly domestic work or street vending. According to the fifth national economic census, at the end of 2023, there were 180 million self-employed workers. (This figure covers secondary and tertiary industries, excluding agricultural workers but including those providing professional services to agriculture.) The Ministry states flexible workers exceed 200 million. A university research report claims domestic flexible employment reached 280 million in 2025, but this lacks detailed breakdown. A reasonable estimate is that broad flexible employment stands around 250 million, equivalent to roughly 45% of the non-agricultural workforce.

Defining Employment and Unemployment

How are official employment and unemployment figures derived? They come from surveys. The National Bureau of Statistics runs a monthly labor force survey across urban and rural areas in all 31 provinces. Each month, 340,000 households are sampled approximately 250,000 urban and 90,000 rural covering both family and collective households. This leads to a fundamental question. What exactly constitutes employment? China adopts standards recommended by the International Labour Organization. The employed population includes those aged 16 and over who worked at least one hour for pay or profit during the reference week. Unpaid trainees or volunteers are excluded, as are those farming purely for self-consumption without market sales. However, those on paid leave like holidays or sick leave count as employed. If you are laid off temporarily without pay and cannot return soon, you do not count as employed. For unemployment, three conditions must be met simultaneously: no job during the reference week, actively sought work in the three months prior, and available to start within two weeks if a suitable job appears. Students, retirees, and homemakers typically do not meet these criteria and are not classified as unemployed. The 2025 annual average urban surveyed unemployment rate was 5.2%, with a year-end figure of 5.1%. The statistics bureau publishes the urban surveyed rate monthly but not a rural or combined rate. Rural unemployment is generally considered lower due to widespread land ownership and ease of meeting the one-hour work threshold. Urban rates better reflect macroeconomic conditions since cyclical unemployment mainly hits non-agricultural urban jobs. Previously, a registered urban unemployment rate was used, based on individuals voluntarily registering at public employment agencies. Without registration, they were not counted. In 2021, registered urban unemployment stood at 10.4 million people, a rate of 3.96%. This indicator was discontinued after 2022. Using the formula surveyed unemployment rate equals unemployed divided by the sum of unemployed and employed with urban employment at 475 million and a 5.2% rate, urban unemployment is estimated around 26 million, though this is just a rough personal calculation.

The employed plus unemployed constitute the labor force, those participating in or seeking economic activity. Those outside this are classified as not in the labor force, including people not working and not looking for work in the past three months or unavailable to start within two weeks. Summarizing the 2025 data structure: a total population of 1.405 billion, roughly 1.175 billion aged 16 and over, about 851 million aged 16-59, an estimated labor force of 755-765 million, and around 410-420 million not in the labor force. Among this latter group, over half are retirees, followed by full-time students, then homemakers, those unable to work, and discouraged workers. Retirees re-entering paid work count as employed. Those seeking work and available within two weeks are unemployed. In July of this year, new regulations on over-age workers took effect, with estimates placing this group between 87.2 million and 122.5 million people.

Two Perspectives on Gig Work

Flexible employment is a hot topic, viewed from two main angles. One perspective focuses on employment pressure. Some scholars argue that while surveyed unemployment rates seem stable, reality feels different. When more people shift to gig work, pressure may not show up as higher unemployment but rather as less stable jobs, longer hours, and lower hourly pay. Data reveals that the number receiving unemployment insurance rose 115% from 2021 to 2025, indicating significant labor market shifts not fully captured by the surveyed rate. Recipients represent only a small fraction of the unemployed, as nearly half of urban workers, including many gig workers and self-employed, lack this insurance. Even those insured may not qualify due to contribution periods or voluntary departure. Furthermore, a former formal employee who becomes a ride-hailing driver or delivery courier is reclassified as employed, experiencing a drop in job quality but not raising unemployment statistics. The other perspective views gig work more positively as a global phenomenon. In 2023, the US had 64 million flexible workers, over 38% of its workforce. Observers note that while US and EU economies are 2.5 times China's size, their combined employment is around 380 million. Even adjusting for gig workers, it is about 260 million. China could only create 700-800 million full-time fixed jobs if its economy reached two to three times that of the US or EU, which is unattainable, so flexible employment will persist. Moreover, platform-driven gig work represents an upgrade compared to traditional factory or construction labor. Wage data shows ordinary blue-collar and low-skilled service jobs pay around 5,000 yuan monthly, while high-frequency delivery riders and ride-hailing drivers can earn 8,000 yuan or more, explaining why some young people prefer these roles. Conversations with many couriers and drivers reveal both realities. Some former business owners turned drivers have experienced declining job quality, with one reporting two hospitalizations for spinal issues after four years of driving. Conversely, interviews in a major courier-sending county in Anhui found most riders experienced improved job quality with higher income and more flexible hours, though the work remains demanding and long.

A New Window for Reform and Development

Among the world's 16 countries with populations exceeding 100 million, per capita GDP varies widely. Besides the US and Japan, China, Russia, Brazil, and Mexico hover around 10,000 to 20,000 dollars. The remaining ten countries range from 5,000 dollars down to 1,000 dollars, far from prosperity. Achieving high-quality, full employment and wealth for a large population is extremely difficult. China's progress among populous nations is tied to improvements in human capital and employment quality over many years. Employment challenges cannot be ignored, but given the enormous population base, current achievements should not be overly criticized. Today's pressure is real, and high-quality job supply is insufficient, but the solution is not directing more people from flexible to fixed, or even "iron rice bowl" style jobs. That would move further from market vitality and potentially toward a lower-development equilibrium. In fact, universal stability is unattainable. While young people increasingly seek stability in civil service exams and public sector positions, these stable posts are shrinking. Many central state-owned enterprises reduced campus recruitment for 2026, and national civil service exam openings declined for the first time since 2019. This clearly shows there are no permanent havens. Fundamentally, solving employment requires stabilizing market expectations, invigorating market entities, and fostering new economic development. Additionally, given the growing flexible employment group's importance, systematic long-term arrangements are needed to provide both flexibility and greater security. In September, seven departments including the National Healthcare Security Administration issued guidelines to increase basic medical insurance coverage for flexible workers over three years, particularly for employee-based insurance. Key measures include lowering enrollment barriers, removing household registration restrictions in mega-cities so people can enroll where they work, allowing monthly accumulation of contribution years, exploring conversion of resident insurance years to employee insurance years, and offering flexible payment options like quarterly or semi-annual schedules. These steps signal a direction toward granting gig workers protections similar to formal urban employees. Platform companies should make greater efforts in this area. Just as urban employment pressure spurred economic reform at the dawn of the opening-up era, today's employment challenges and the prominent gig workforce present another opportunity for reform and development. This concerns not only social fairness but also human dignity and growth.