It is never too early to start preparing for the Chinese New Year. Although it is celebrated mostly in Asian countries, importers feel its impact on global trade each year. Chinese New Year, also known as the Spring Festival, is the only opportunity for many Chinese workers to return home and reunite with their families. Mass migrations cause many hindrances, such as the temporary shutdown of factories, transport delays, etc. See what you need to prepare so that the Chinese New Year does not surprise you when you import from China.
When exactly is Chinese New Year celebrated?
It is worth remembering that traditional Chinese holidays are based on a lunar calendar, not the Gregorian one. Therefore, each year you should check on which day they fall. Chinese New Year’s Day usually falls in the second half of January or the first half of February, with January 21 being the earliest possible date and February 20 the latest.
However, it should be noted that although the holiday itself lasts for several days, its effect lasts for four weeks. How is this possible? Officially, non-working days are one week from the day before Chinese New Year. For example, in 2021, CNY falls on 11-17 of February. However, preparations for the celebration already start around ten days before the Christmas break due to logistical reasons – many employees will have to travel hundreds or even thousands of kilometers to return home. Many of them stay in their hometowns for about a week or two, further delaying the return to the regular order of things.
In the following years, the dates of the Chinese New Year are as follows:
2021: February 12 (public holidays 11-17 of February)
2022: February 1 (public holidays January 31 – February 6)
2023: January 22 (public holidays 21-27 of January)
What is the situation in China during the Spring Festival?
Chinese New Year celebrations are closely tied with the world’s largest annual migration. It is no exaggeration – about 3 billion journeys are made by various means of transport during this period. Most public transport tickets sell out long before Christmas because everyone wants to be with their family to celebrate.
In China, production is mostly concentrated in the highly developed provinces on the country’s east coast. Many factory workers move into these provinces in search of better wages, but their families often remain in remote regions. The interactive map of Baidu from 2015 allows you to visualize the scale of the Spring Festival’s migration phenomenon:
During the Spring Festival celebrations, moving around China is especially difficult due to crowds and lack of available seats in trains and buses. Business trips are not recommended during this period. Most businesses and stores close during the holidays, as do service points and most banks. These factors have an enormous impact on the supply chain and require extensive preparation from importers. Below we describe how the Chinese New Year affects imports from China and how you can prepare for it.
Chinese New Year and import from China
How do Chinese New Year celebrations affect production?
1. Halted production
The most noticeable and business-critical effect of the Chinese New Year celebrations is the temporary shutdown of factories. Some of them shut even for a month. Production usually stops about a week or two before the holiday. At times, it does not depend on the business partner – remember that many suppliers are dependent on subcontractors. An early shutdown of one factory could cause an unexpected disruption to the supply chain faster than predicted.
Office workers usually stay at work a few days after the production halts, so you can still contact them during this period. However, on the day before Chinese New Year, you can no longer reach them.
2. Gradual return to regular production
Going back to regular production is a complicated process, mostly because employees usually only return to factories after a week or two. What is more, it is not uncommon for some of them to quit their jobs without prior notice and never return to the factory. The period after the Chinese New Year is a time when many people decide to change jobs. It is another challenge for manufacturers – they have to hire and train many new employees in a short time. It leads to lower quality of products.
As for office workers, they will most likely be available few days after the end of the holiday break. In most factories, production will start approximately two weeks after the end of the holiday.
3. Issues with quality
Change of workers may have an impact on temporary product quality issues. The reason may also be the rapid pace at which the factory has to complete a large number of orders after Christmas. When production is halted, previous orders are already accumulated, and when the business is reopened, many new orders flow in. After returning to regular production, manufacturers need to quickly make up for the lost time, which often affects products’ quality. In the post-Chinese New Year period, special attention should be paid to quality control.
What transport difficulties can you expect?
During the Chinese New Year, the transport industry deals with staff shortages due to migration within the country. Most Chinese ports operate to a very limited extent during the celebrations. Just before the Spring Festival, the period is particularly intense when many importers place large orders to stock up on goods. The factories then operate with double power to keep up with production, and the demand for transport services is huge. On the one hand, this results in higher prices for the transport of goods, and on the other – delays.
Overload at ports in the pre-holiday season means that not all cargo will get on board. Those who can pay the price will get loading priority and a piece of mind. Some containers may be set aside and shipped later, which means they will be shipped after the holidays. Additionally, customs procedures may take longer to carry out.
Chinese New Year and import from China – how to prepare?
Chinese New Year is a challenge for importers, especially for beginners. Novice beginners may end up without enough goods in stock at the beginning of a year. The key is to make appropriate preparations long before this difficult trading period starts. We have prepared some tips that can help you save yourself some stress:
1. Place your last order of the year as soon as possible.
Ideally, this should be done by November, or even earlier, as production time and possible downtime due to heavy port traffic should be included. There is no sense in placing a late order. In this case, the goods will not arrive quickly, and the goods shipped in a hurry may be of lower quality.
2. Think carefully about the order quantity.
As already mentioned, officially, the Spring Festival lasts only seven days, but the overall halt of production lasts about a month. You should analyze sales in your company in previous years and prepare a forecast for what amount of given goods may be in demand in the first months of the year and place the order in advance.
3. Organize your financial matters before the Chinese New Year.
Banking operations, especially between China and overseas, are severely restricted during the holidays. Therefore, it is safest to deal with this issue in advance. On the other hand, it is advised not to make large payments in advance to unverified companies before the Chinese New Year. There is no guarantee that they will reopen after the holidays.
4. Plan transportation in advance.
As already mentioned, most importers place large orders before the Chinese New Year, which leads to overloads of containers at ports awaiting to leave China and to higher freight rates. The earlier you plan everything and book shipments, the easier it is to avoid these problems. Make sure the goods are in port at least ten days before the Spring Festival.
5. Pay attention to quality control both before and after the Chinese New Year.
Earlier, we explained how the Spring Festival celebrations affect the quality of goods after the holiday season. However, one should not forget about the factories’ pre-Christmas preparation period for larger orders. In a hurry, it is easy to overlook oversights. Therefore, be especially vigilant to ensure that the quality is good enough even before Christmas.
6. Be in contact with your supplier.
Building relationships is significant in Chinese business culture. Orders placed by regular partners will have the highest priority in the pre-Christmas period. It is also worth consulting with your Chinese partner when the production is halted and for how long, as it varies from factory to factory. This way, you will be able to plan your orders accurately and avoid suffering losses.