Chinese New Year, also referred to as Lunar New Year or Spring Festival, is one of the most significant Chinese celebrations. The upcoming Chinese New Year will fall on February 1, 2022, and in connection with the celebration, a seven-day public holiday will be held between January 31 and February 6. This is earlier than 2021, when the new year didn’t start until Feb 12th. Hence, the time to get products shipped in the window between Christmas and Chinese New Year is even shorter than in 2021.
Production Impact Before and After the Chinese New Year
In any given year, the Chinese New Year impacts capacity to and from China and Asia in general. The usual consequences of this include long transit times, flight cancellations, and blank sailings, which have a significant impact on the global freight market for weeks after the Chinese New Year.
According to Chinese conventional consuetude, many people return to their hometowns to celebrate the Chinese New Year with their families. The CNY holiday officially lasts for 7 days, however, many workers don’t return for another week or two. This usually has a significant impact on the manpower in most Chinese workplaces.
1) Production is halted one or two weeks before the Chinese New Year's Eve
While the Chinese New Year Eve is set on Tuesday, February 1st, 2022, all factories start to wind down operations one to two weeks in advance.
As such, the CNY puts a halt to mass production, far earlier than many buyers anticipate. This is not always in your supplier’s direct control. Get confirmation on their schedule well in advance to prevent delayed orders.
2) Production is halted for at least two weeks after the Chinese New Years Eve
While the official holiday is only lasting for roughly 5 working days, plus two weekends, most workers remain in their home provinces for an extra week or two. This explains why most suppliers are not back in business until two, sometimes even three, weeks after Chinese New Years’ Eve.
How Importers Can Prepare for the Chinese New Year?
1) Plan ahead and think of alternatives
Furthermore, it is not uncommon that businesses without strategic supplier relationships face additional challenges with orders ahead of Chinese New Year. There is massive pressure on the suppliers in this period, and because of this, many have to prioritize their orders and customers. We, therefore, recommend investing additional time and resources in your suppliers throughout the year and working towards confirming a diversified supplier pool if you have not already done so.
2) Understand the unusual circumstances
In addition to the impact of the upcoming Lunar New Year, the following factors may have an impact on the coming months. These factors include COVID-19 restrictions, global supply chain congestion, power restrictions and the Beijing Winter Olympics.
Chinese power curbs – i.e. the electricity rationing which was recently introduced in many parts of China to reduce carbon emissions – are also likely to have a significant impact on production in the coming months. The extent of the policy varies from province to province, but in some places, the power curbs have resulted in factories cutting output or halting production entirely.
The 2022 Winter Olympics will take place in Beijing between February 4 – 20th, and it is still uncertain what the implications of the event will be, as no official Control Policy has been published yet. However, we expect that the security inspection level and road control will be increased in certain areas.
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