This year the transition from the year of the goat to the year of the monkey will start on Monday, February 8, but in the week before is important for preparations and start of the annual massive migration wave. As for large portion of China’s workforce, the Spring Festival is the only time of in a year and a vast majority uses it to travel to their hometowns and villages. Due to this massive movement of people across the country, many businesses in big cities such as Beijing and Shanghai close down for at least one week.

The holidays can therefore have disruptive implications on doing business. If your business is in China or with Chinese counterparts, it’s important to be aware of the effects of what is essentially a nationwide shutdown, particularly with regards to ordering, payment, supply chains and quality.

It goes without saying that it is essential to stock up beforehand to ensure you have enough stock to make it comfortably through the holiday period, as manufacturers and ports close for days. Furthermore, suppliers may try to rush into increasing production before the holidays as to fill the ‘New Year gap’ but this often leads to delivering lower quality.

You may experience quality issues even after the holiday as high employee turnover means that many positions will have to be filled by new workers who first have to be found and trained in order to replace those that don’t return after the Spring Festival. You should, therefore, not expect everything to run smoothly right after the official holidays are over – training new staff can also cause delays in the supply chain. It’s reasonable to monitor the situation and communicate with your counterparts in the months leading up to, and after, the holiday in order to minimize any potential lapses.

Putting such a large mechanism as Chinese industry back to work after being halted for the holidays is of course not an easy task and it is reasonable to assume production processes will get back to the normal speed and scale about two weeks after the end of the officially week-long holidays

Sources:

«The Chinese New Year: How Importers Can Avoid Delays & Quality Issues» China Importal, http://www.chinaimportal.com/blog/chinese-new-year-impacts-import-business/

«Understanding Chinese New Year and Its Implications for Foreign Businesses», China Briefing, http://www.china-briefing.com/news/2015/12/22/understanding-chinese-new-year-and-its-implications-for-foreign-businesses.html

«Chinese New Year’s effects felt around the world» CBC, http://www.cbc.ca/news/world/chinese-new-year-s-effects-felt-around-the-world-1.2961313

Annex Asia Publishingpublishing@annexasia.com

Image: International Business Times

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