When Do China Suppliers Go On Holiday for the Chinese New Year?

Here is an edited discussion (to protect identity of parties) regarding a question about how the Chinese New Year Holiday impacts the supply chain of electronics sourced by a US company, but the answer is applicable at a national level for a wide range of products, so I decided to blog about the Q&A.

chinese new year

Here is an edited discussion (to protect identity of parties) regarding a question about how the Chinese New Year Holiday impacts the supply chain of electronics sourced by a US company, but the answer is applicable at a national level for a wide range of products, so I decided to blog about the Q&A.

 

“Do you have any information on what the Chinese authorities will do for the Chinese New Year this year, in terms of when the supplier will be on holiday?  We've heard that CNY shutdowns may happen for longer and earlier this upcoming year.  Looking to get ahead of this as best possible”

 

China has to be one of the few places where the average joe doesn’t know the exact dates of the national holiday until weeks, sometimes only days before the official holiday starts. 

But given that factories tend to spread out the dates so some staff leave early/come back early and have other staff leave late/come back late… regardless what the official holiday is, you can expect many factories to have their last day of fully staffed operations a week or so (depending on where the weekend falls) before the actually official holiday starts.

The officially holiday is usually 12 to 14 days (depending on where weekend falls). But if the central government wants to boost consumer spending in a given year, the dates could be wider as their theory is that folks spend more money when on holiday.

To complicate matters this year:

  •   If the central government is worried about Covid and travelers, they could change the whole structure.  
  •   If certain factories are running late to get orders out, given the supply chain mess, they may opt to take a shorter holiday.
  •   If certain factories are about to go out of business because they didn’t survive Covid or something, they could close up any day and just not come back.

In other words, for 2022, my best guess is that the average factory will be essentially off line from 1/21 to 2/10 at a minimum.  So be sure to visit with key suppliers in the month before just to gauge where they are at for their specific business.

Incorporating Delivery Dates in Contracts with Chinese Suppliers

When considering the impact of Chinese New Year production shutdowns on your supply chain, you should take the opportunity to confirm that your contracts are in order. 

  •   Have you incentivized the supplier to get your order out on time? 
  •   Do you have an agreed ship date and penalties for missing that date? 
  •   What prevents the seller from shipping defects just to get the orders out the door? 
  •   Are you protected in the event the seller closes up shop for good during the holiday? 

Related Content:

ABL Blog: Sr. Editor and Primary Content Creator:  Michael J. Bellamy

About the Author: Michael J. Bellamy

Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses.  Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.

A featured presenter on China issues at seminars, trade shows and corporate events across the globe.

Learn more about Mike and AsiaBridge Law at
https://www.asiabridgelaw.com/business-advisory-services/

Mike is the author of “The Essential Reference Guide to China Sourcing
(available on Amazon).

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