China's gig economy, which employs over 200 million people, is becoming precarious as AI threatens jobs and growth slows, raising concerns about economic stability and youth unemployment.

What happened: More than 200 million people work flexibly in China's gig economy, but AI has made many of those jobs precarious. The number of ride-hailing drivers, truck drivers, and livestreamers is declining as growth in the sector cools.

Why it matters: China's gig economy has historically absorbed millions of unemployed workers, but experts question whether it can continue to do so as AI displaces jobs. Beijing's 2026 growth target of 4.5–5% — the lowest in decades — combined with slowing gig economy growth, is widening divides in the blue-collar labor market and raising the risk of persistently high youth unemployment.

What to watch: An expert at Zhejiang University stated that "the employment situation is severe," signaling deepening concern about whether China's labor market can adapt to both AI disruption and slowing economic growth.