China’s Vanishing Jobs Target, Flexible Work, and Gen Z’s Move to Smaller Cities

Alice Han and James Kynge read three signals off the same week’s China news — a vanished jobs target, a state-vs-state tussle over an AI startup, and a generational retreat from big-city life — as different faces of one story: a labour market and a workforce absorbing the shock of AI and automation faster than Beijing can plan for it.

Key ideas

1. Beijing dropped its urban jobs target for the first time in decades. China’s 15th Five-Year Plan, released days before the episode, set no numerical target for new urban job creation — the first time since at least the 1990s that a headline jobs number has been left out of the country’s medium-term plan. The previous five-year target was just over 55 million new urban jobs, itself only slightly above the roughly 40 million set in the late 1990s. Han and Kynge read the omission as the state admitting it cannot forecast a labour market being reshaped simultaneously by AI displacement and a shrinking, ageing population — an unusual retreat for a political system built on setting targets.
2. Flexible, gig-style employment now covers 44% of China’s workforce. Kynge cites a figure of about 320 million workers in ‘flexible employment’ this year, up from roughly 280 million last year — a scale he compares directly to the entire US population (roughly 350 million) to convey its size. He calls it ‘a very lopsided, very imbalanced economy’ with the potential to ‘engender social stability issues,’ and draws a direct parallel to the late-1990s dismantling of the state-owned-enterprise ‘iron rice bowl,’ when roughly 35 million SOE workers lost jobs, pensions, and housing subsidies in a bruising but ultimately successful restructuring.
3. AI and automation are visibly displacing both blue-collar and white-collar work. Kynge, reporting from a recent trip to China, describes Xiaomi’s Beijing car factory running 100% automated production lines — no humans on the line itself, 700 robots, a new car produced every 76 seconds — and a robot expo showcasing robot surgeons, waiters, and shop assistants. He pairs this embodied-AI wave with white-collar displacement from large language models, on top of roughly a decade of intensive factory automation, as the twin forces squeezing China’s job market from both ends.
4. Tencent is moving to buy into Manus after Beijing blocked Meta. Tencent Holdings is in talks to become the largest shareholder in Manus, a Chinese-founded agentic-AI startup, after Beijing rejected Meta’s roughly $2 billion bid to acquire the company on regulatory and national-security grounds and ordered the deal unwound. Tencent — China’s biggest listed company by market capitalisation (about $533 billion) — wants to embed Manus’s agentic AI inside WeChat, used by roughly 1.4 billion people. Manus’s co-founders were summoned to Beijing and questioned by the National Development and Reform Commission over foreign-direct-investment disclosure rules; Chinese officials reportedly described Meta’s attempted acquisition as ‘a conspiratorial attempt to hollow out China’s technology base.’ Han and Kynge read the episode as evidence that Beijing, not just Washington, is now moving first to block foreign access to homegrown AI.
5. Gen Z is trading tier-one cities for tier-three and tier-four life. Citing an FT piece on ‘ghost cities being revived by the youth,’ the hosts describe Chinese graduates — about 20%, by Han’s figures — relocating from Beijing, Shanghai, and Shenzhen to cheaper smaller cities, helping absorb China’s vast oversupply of housing (a shadow supply Goldman puts at around 100 million units). Kynge frames it as an escape from 996 culture (9am–9pm, six days a week) and compares it to 1970s Japanese salaryman burnout, while noting Xi Jinping has publicly urged citizens to ‘eat bitterness’ rather than opt out, and that China’s Ministry of State Security has accused overseas actors of funding influencers to promote ‘lying flat.’ The trend sits alongside ‘Dreamcore’, a social-media nostalgia wave for the more optimistic China of the 2000s.

Context

The Five-Year Plan is China’s central medium-term policy anchor, and a numerical jobs target has been a fixture of it since the market reforms began — its absence here is a genuine break, not routine variation, and both hosts treat it as the clearest available signal of how uncertain Beijing itself is about the labour-market effects of AI and demographic decline. That uncertainty is the thread linking all three segments: a state unwilling to commit to a jobs number, a flexible-employment sector already absorbing the shock informally, and a generation opting out of the high-pressure city track the state has spent decades building rather than wait to find out where AI leaves them.

Related

• Alice Han — host
• James Kynge — host
• The U.S. vs China AI Battle Is Getting Ugly — the same hosts’ earlier read on Beijing blocking Meta’s Manus acquisition, before Tencent’s move to buy in
• Kaiser Kuo, Eric Olander, and Andrew Polk on China's 15th Five-Year Plan, ASEAN Realignment, and the Collapse of the Trade Truce — a fuller treatment of the same Five-Year Plan and its ‘elite overproduction’ graduate-employment problem