China's Secret Weapon in the Trade War

Its miraculous gig economy is propping up jobs.

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As China's export machine sputters under the weight of 145 per cent tariffs, jobs are at risk. Some 16 million workers are involved in the production of goods bound for America, says Goldman Sachs, a bank. Nomura, another bank, projects a possible 5.7 million job losses in the near term and 15.8 million in the long run as the shock ripples through the economy.

China's leaders are already yanking levers to soften the blow. At a Politburo meeting on April 25, they vowed to increase rebates of unemployment insurance payments for firms hit by tariffs. But there is another labour market saviour: the vast gig economy. Indeed, President Donald Trump's trade war could complete that sector's metamorphosis from a freewheeling industry viewed with suspicion by the Communist Party, into the world's largest state-approved e-market for labour, with a stronger safety net attached.

The party is turning to the gig economy because it is vast: The state-controlled trade union federation estimates there are 84 million people relying on "new forms of employment", including delivery services and ride-hailing.

The government cites a broader category of 200 million "flexible workers", including the self-employed and part-time workers. Both figures far exceed the 54 million jobs at state-owned enterprises in cities, and make up a big chunk of the 734 million-strong workforce. One delivery firm, Meituan, uses 7.5 million couriers who get paid US$11 billion (S$14.2 billion) a year. Drivers often describe their taxing work as guodu, a transitional job "to ferry over a stream".