What does Chinese New Year Mean For Your Business?
First there are 3 key facts that will help you better understand the Chinese New Year (CNY) holiday.
ALL FACTORIES ARE SHUT DOWN STARTING FEB 12th, 2021 Without exception, all factories in China are shut down during CNY. This is a holiday for all of China and it's citizens so the factories cannot force employees to work.
TOTAL FACTORY DOWNTIME Even though the official holiday is only for 5 business days plus two weekends, the fact is that the total downtime is closer to a month! Factories will start winding down 1-2 weeks before CNY Eve. Production typically continues to be halted for 1-2 weeks after CNY as workers stay in their home provinces for an extended period of time.
FREIGHT SHIPMENTS ARE STILL AFFECTED Even though ports remain operational, freight forwarders will generally shut down for the week. And with the factories closed, it's not possible for them to pick up new shipments. Fortunately freight transport itself is not disrupted at the same level as the factories.
How to avoid delays and disruptions to your business.
Be careful to not make deposits to your suppliers before CNY Factories that are not financially stable and intend to permanently shut down, will typically do so at CNY.
Keep working with other operational areas of the factories Administrative functions will generally be open and available before and after CNY. This may allow for negotiations, product research, samples and due diligence.
Don't make last minute orders in January Quality issues may arise as factories rush to get orders out ahead of CNY. This is also the time to be extra diligent with your quality assurance efforts.
Make sure production is finished in time If your production cycle is 30-40 days, then you should start production in late November so it can end 2 weeks prior to CNY.
Feb 1st - Suppliers and subcontractors start slowing and stopping production
Feb 8th - Workers have left the factory while administrative workers may still remain
Feb 9th - All employees have left the factories
Feb 12th - Chinese New Years Eve
Feb 22nd - Administrative staff starts to return to work
March 1st - Factories are fully functional and have resumed production
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