Weekend Long Read: Why Temporary Workers Are a Growing Presence in China’s Factories

The manufacturing sector remains a cornerstone of China's economy despite a growing services sector. In 2020, about 114 million people, or 27% of the non-agricultural workforce, were employed in manufacturing, marking a 10% decline from 2010. Factors such as demographic changes and a surge in industrial robots—of which China has one-third of the global total—have influenced this decline [para. 1][para. 2][para. 3][para. 4][para. 5].

To counter this trend, policymakers have been emphasizing manufacturing since 2020, seeking to observe and adapt to changes fueled by new technologies [para. 6][para. 7]. One notable trend is the gig economy within the manufacturing sector, where firms hire workers only during peak demand periods instead of maintaining a full-time workforce. Research in Kunshan indicates that this trend stems from volatile export orders and workers' increasing awareness of their rights [para. 8][para. 9][para. 10][para. 11].

Technological advancements have enabled factories to rely on temporary workers, who generally possess enough skills for factory tasks. This helps companies avoid significant costs related to permanent employee obligations such as social insurance contributions mandated by China's Labor Contract Law. Consequently, firms prefer labor service agreements with temporary workers, exploiting loopholes to circumvent a government-imposed 10% limit on temporary staff [para. 12][para. 13][para. 14][para. 15].

Surveys estimate that temporary workers comprise about one-quarter to one-third of the manufacturing workforce, far exceeding official estimates which suggest about 10%. Public data underestimations arise because traditional statistical methods can't capture the dynamism of temporary labor. Detailed surveys of 700,000 workers across the Yangtze River Delta and Pearl River Delta indicate that up to two-thirds of workers can be temporary during peak times [para. 16][para. 17][para. 18].

Gig workers in manufacturing are generally young, with an average starting age of 26, and about 90% have rural household registrations. Although 60% hold at least a senior high school diploma and 15% are university graduates, these workers exhibit low retention rates and high joblessness. The gig economy’s structure often leaves them without social insurance, with nearly half lacking such coverage [para. 19][para. 20][para. 21][para. 22].

An analysis of data from January 2019 to April 2024 shows that Chinese manufacturing workers often work long hours—10 hours a day, six days a week—with little correlation between education and job stability. While higher education offers more diverse job prospects, it does not significantly affect productivity or wages within consumer electronics. Automation and AI further polarize skills, pushing higher-educated individuals toward temporary work [para. 23][para. 24][para. 25][para. 26][para. 27][para. 28][para. 29].

The significant presence of gig workers underscores China's ability to quickly mobilize labor, enhancing its global competitiveness. However, this transient employment poses challenges to social security and worker productivity. The polarization of wages and misalignment of education with market demands further complicate development. Smart manufacturing's low-skill front-line jobs reduce demand for medium-skilled labor, urging deeper reflection on aligning educational development with technological progress [para. 30][para. 31][para. 32][para. 33][para. 34].

In conclusion, China's manufacturing sector faces a dynamic landscape influenced by the gig economy and technological advancements, necessitating thoughtful policies to ensure sustained growth and social equity [para. 35][para. 36][para. 37][para. 38][para. 39][para. 40].