When the Chinese New Year (CNY) holiday comes around each year, it throws many newer importers for a loop. These importers often don’t realize how much impact this holiday will have on their production timelines, product quality, and shipping schedules.
As many seasoned importers will tell you, it’s critical to start planning for the holiday far in advance. Factories shut down for several weeks, and after they reopen, it takes at least a few more weeks to get back up to full production capacity.
CNY slows business down in a way that no holiday in North America, Europe, or Australia ever does. It also leads to increased quality issues that you need to mitigate around the holiday period. Here we discuss the impact of this holiday and the actions you should take to avoid problems in your business.
How Long do Factories Shut Down for Chinese New Year?
During CNY, every factory in the country shuts down… Yes, every factory. The official public holiday only lasts for seven days. But, the majority of factories are fully closed for between two and four weeks.
Additionally, many Chinese factory workers take extra time off, leaving in the weeks leading up to their company closure dates, which slows production down significantly. Many workers will not return immediately afterward, meaning that it can take up to a month for production to return to full capacity after the holiday.
Why do Factories and Employees Take So Much Time Off?
Chinese New Year, also called the Spring Festival, is the country’s most important holiday. Like Thanksgiving or Christmas in the US, people travel back home to spend time with their families.
Since most factory workers are migrant laborers, they generally live far away from their hometowns and travel hundreds of miles or more to return home. If they have a husband or wife and children, it may even be one of the only times they get to see them during the whole year.
Companies require long closure times to allow workers to travel home and then back to the city where they work. The 40 days of increased travel around CNY is referred to as Chūnyùn (春运), and this is the largest human migration in the world.
Chinese New Year Factory Shutdown 2022: 5 Things You Need to Know
With so many people traveling for Chinese New Year and the lengthy factory closures, there are certain things you need to understand if you want to properly manage your inventory and maintain your expected level of quality.
#1 It Takes Factories at Least a Month to Ramp Back Up after CNY
You might assume that the same workers who left before the holiday will be coming back afterward. This is generally not the case, as Chinese New Year is considered the best time to switch jobs in China.
Up to a third of workers might move to another factory or decide to stay in their hometowns and not come back. As such, your manufacturer needs to hire new workers and get them up to speed. Because of this, many factories will not be back to full production levels until about a month after CNY.
#2 There are Increased Quality Issues Before and After the Holiday
Before the holiday, factories are in a mad dash to get orders out the door, which leads to more things being missed and more quality issues than usual. After the holiday, the factory needs to hire new workers who are more likely to make mistakes than the previous, more experienced ones.
As such, you should consider stepping up your product inspection efforts in the months before and after the Spring Festival. You can hire a reliable third-party inspection company (like Insight Quality Services) to help you do this.
#3 The Cost of Shipping Around The Holiday Goes Up Drastically
With the lengthy factory closures and the rush to get products out beforehand, manufacturers will generally charge more if you want to ship an order close to CNY.
In addition to your factory taking time off, shipping companies take time off as well. As such, heavy volumes are going to the ports before the holiday with only a limited number of ships, which means shipping rates go up.
In 2021, importers have seen many shipping issues already due to the pandemic. We can only expect the Chinese New Year holiday to add another layer to this in 2022.
#4 You Should Never Pay a Deposit Just Before the Spring Festival
Sometimes companies go out of business — and in China, this is the most common time of year to close down permanently. Factories that have not been doing well financially often choose to go out of business during CNY.
Paying a deposit just before the holiday can be a disastrous proposition. If your factory intends to close permanently and does not tell you, you may never get it back, so be sure to wait until they reopen.
#5 You Need to Forecast Far in Advance to Adjust for Production Times
As we’ve discussed, several factors affect production around the Chinese New Year. These include the rush before the holiday, the long closure times, and the ramp-up period afterward.
For any orders you would want to receive in March/April, you would typically start discussing them with your suppliers by around September/October. However, due to all the Covid-related supply chain bottlenecks in 2021, many experienced importers have wisely chosen to place their orders earlier this time around.
Always forecast your inventory needs far in advance and take holiday closures into account when developing your ordering schedule.
When do Factories Close for Chinese New Year 2022?
The dates for Chinese New Year and other traditional festivals are based on the Chinese lunar calendar, and thus they change every year, relative to the Gregorian calendar we use in the West.
February 1st, 2022 is the first day of the “Year of the Tiger.” The official government holiday lasts from January 31st through February 6th. However, some factories will close earlier in January. So check with your factory contacts to get their exact closure dates.
In the next three years, the first day of the new year will be celebrated on the following dates:
- January 22, 2023 – Year of the Rabbit
- February 10, 2024 – Year of the Dragon
- January 29, 2025 – Year of the Snake
Some Other Chinese Holidays to be Aware Of
In addition to the Spring Festival, there are other holidays you should know about. In 2022, China will celebrate the following holidays with time off. While these holidays are nowhere near as significant, they do have some impact on shipments.
- New Year’s Day – Jan 1
- Qingming/Tomb Sweeping Festival – April 5
- Labor Day – May 1
- Dragon Boat Festival – June 3
- Mid-Autumn Festival – Sep 10
- National Day/Golden Week – Oct 1 through Oct 7
Communicate with your factory before each holiday to determine which specific days they will be taking off.
Lunar New Year in Vietnam, Malaysia, South Korea, etc.
Aside from China, the Lunar New Year is celebrated in a number of other Asian countries where you may have manufacturing partners. These include Vietnam, South Korea, Singapore, and Indonesia.
While the Lunar New Year is an important holiday in these countries, the impact on production is not as significant as in China. For example, the official holiday in Vietnam, called Tet, lasts from Jan 31st – February 4th, 2022, and factories may take up to two weeks off.
Production times may be impacted, and quotations may be delayed. However, the delay is not as significant as in China, where the impact can span more than a month.
Chinese New Year Shutdown 2022: Managing Product Quality
As we’ve discussed, Chinese New Year is the most important holiday in China and leads to significant factory downtime and increased quality mishaps. As such, you should step up your quality control efforts around this time.
Consider hiring a third-party product inspection company (like Insight Quality Services) to help you conduct inspections before your goods leave the factory. These inspections will help you ensure the quality of your products and avoid poor customer reviews and returns.
For more information about inspections, we recommend reading the following guide.
Free Guide: 7 Things About Third-Party Inspections
When hiring manufacturers in developing countries, managing product quality becomes more challenging. Working with a third-party inspection company like ours helps you to ensure product safety, minimize returns, and maintain your good brand image. Read this guide to learn 7 important things about them.
Please Note: This article was originally written in February of 2019 and was most recently updated in September of 2021