China Proposes Sweeping E-Commerce Law Overhaul to Protect Gig Workers

China has unveiled a sweeping proposal to overhaul its e-commerce regulations, threatening major tech platforms with hefty revenue-based fines while granting the country’s massive gig workforce a formal legal role in market governance and arming Beijing with new legal tools to retaliate against foreign trade discrimination. The draft revision, released on July 4 by the State Administration for Market Regulation (SAMR) and the Ministry of Commerce, is the first major update to the E-Commerce Law since it took effect in 2019.

Scope of the Proposed Changes

The 20-article draft amendment modifies nearly a quarter of the seven-year-old law, adding 10 new articles and amending 12 existing ones, according to Caixin Global. The public comment period runs until August 4, 2026, after which the legislative process will proceed toward enactment.

The revision expands the law’s regulatory scope beyond platforms and merchants to cover all participants in the “platform economy,” including logistics providers, payment processors, and AI-powered shopping agents. As Xinhua News Agency reported, the amendment establishes a “refined responsibility matching principle” requiring platforms to bear obligations proportional to their service type, closing loopholes that allowed new business models to evade accountability.

Gig Worker Protections

A centerpiece of the overhaul is the legal recognition of gig economy workers — including delivery riders, ride-hailing drivers, and short-video creators — as formal participants in market governance. China has approximately 84 million workers engaged in “new forms of employment,” accounting for 21% of the total workforce, with projections suggesting the figure may surpass 100 million in 2026.

The draft legally integrates these workers into the regulatory system, giving them a formal role in platform oversight. As China Daily noted in its coverage of the April 2026 central-level policy framework for gig worker protections, over 70% of such workers are aged 18-35. The new provisions build on that framework, which mandated minimum wages, maximum working hours enforced by apps, and algorithm transparency.

“The new employment group is an important component of China’s workforce and an indispensable force for socioeconomic development,” Zhang Dandan, a professor of economics at Peking University’s National School of Development, told China Daily. “It has now become a crucial pillar of the job market.”

Proportionate Fines and Multi-Tiered Penalties

The draft introduces a significant escalation in enforcement capabilities. For platforms with “especially serious violations, especially恶劣 impact, and especially severe consequences,” fines can reach up to 5% of the platform’s previous year’s annual revenue. This “proportionate fine” mechanism aligns e-commerce regulation with China’s antitrust and personal information protection laws, creating meaningful deterrence for the largest platforms.

The amendment also replaces the current binary system of fixed fines (maximum 2 million yuan) and business suspension with a multi-tiered penalty structure. New options include “suspend user registration,” “suspend relevant business,” and “suspend or stop network access services,” allowing regulators to tailor enforcement to the severity of violations, as reported by Xinhua.

Foreign Countermeasure Provisions

The most geopolitically significant aspect of the draft is the new foreign countermeasure provisions. The amendment authorizes China to take countermeasures against countries or regions that adopt discriminatory prohibitions, restrictions, or similar measures against Chinese e-commerce companies. Foreign entities violating non-discrimination, fair trade, and transparency rules can be investigated and placed on an “unreliable entity list,” with potential restrictions on e-commerce-related investment activities with China.

These provisions come amid escalating trade barriers against Chinese cross-border platforms. The Trump administration ended the $800 de minimis exemption for Chinese imports in May 2025, imposing a 54% tariff or $100 flat fee. On July 1, 2026, the EU abolished its €150 de minimis exemption for Temu, Shein, and AliExpress shipments, following a €200 million fine against Temu under the Digital Services Act.

According to the Global Times, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, said: “These foreign-related provisions mark a significant step forward in China’s legal framework for cross-border digital trade. By aligning domestic e-commerce rules with international standards, the amendments will help remove institutional barriers to cross-border cooperation and enhance China’s voice in global digital governance.”

The draft also promotes alignment of Chinese e-commerce rules with international counterparts, including mutual recognition of electronic signatures, identities, and documents. Zhu Keli, founding director of the China Institute of New Economy, told the Global Times that this “will help lower the institutional barriers for domestic e-commerce entities operating internationally, while also creating equal conditions for compliant foreign e-commerce entities to enter the Chinese market.”

Analysis and Implications

The draft revision represents a dual-pronged strategy: tightening domestic control over platforms while shielding them abroad. Domestically, it brings more of the platform economy under formal regulation, closing gaps that allowed companies to operate in grey areas. The timing follows the April 2026 SAMR fines against Alibaba, JD.com, PDD Holdings, Meituan, and ByteDance’s Douyin — a combined 3.6 billion yuan ($528 million) for failing to block unqualified food delivery merchants — and Beijing’s ongoing “anti-involution” campaign against self-destructive price wars.

Internationally, the countermeasure provisions build on the revised Foreign Trade Law that took effect in March 2026, which expanded China’s legal toolkit for responding to foreign trade discrimination. As TNW noted, whether a law designed to tighten control at home can simultaneously serve as a shield abroad “is the central tension the draft does not resolve.”

What’s Next

The public consultation period runs until August 4, 2026. Following feedback, the final law is expected to be enacted through the standard legislative process. Key questions remain: how the “proportionate fine” mechanism will be implemented in practice, whether the gig worker governance provisions will lead to meaningful changes in platform labor practices, and how foreign governments — particularly the US and EU — will respond to China’s new countermeasure provisions. The outcome will shape not only China’s domestic platform economy but also the global landscape of cross-border digital trade.