Doing Business in Asia: Public Holidays in China

DSC_0447Doing business in Asia is always full of surprises. One area where we have been caught out before is understanding the impact of local public holidays and the difference between the published holiday and behaviour that comes with it. Chinese New Year is a great example of just how complex, confusing but also impactful they can be on your business, especially if you are dealing with the manufacturing industry.

As many of you will know, much of China’s manufacturing industry is driven by transitory workers who often live thousands of kilometres away from the plant. Each year after CNY (Chinese New Year or Spring Festival as the Chinese call it) they either return to their factories or go looking for better a better job. The impact of this mobile workforce is significant in a couple of ways.

Firstly it has an effect on the productivity of the factories themselves, while the official CNY holiday only lasts a week, often workers started to drift out of the factory a week or more before the official holiday date, as they head on what can be days or even over a week to return to their home town. From our experience you really don’t want to be pushing to get product out of China in those weeks before CNY. productivity can be hard to judge due to a dwindling workforce and quality issues can also arise as factories look to push all orders out before the shutdown.

Secondly, while the official CNY holiday lasts a week many workers take a longer time to rest and then head back out to work. As I mentioned before, this is also the time when workers also think about improving their job and pay so sometimes they go look for new and different opportunities. Many factories sit back and wait and see how many workers they get back and then sometimes try to find new workers if they don’t have enough staff. Back in 2009, when the Chinese Government invested heavily in infrastructure development and rebuilding after the devastating earthquakes it is estimated that 20 million workers did not return to southern China but stayed closer to their home town to work. The impact on factories, prices, MOQ’s etc was incredible and probably worth a separate blog sometime.

Anyway our advice, avoid Jan-mid March if you are looking to get goods out of China and in many cases even traveling there to meet contacts. While the holiday lasts officially for a week, the impact lasts much much longer.