Implications of Chinese New Year for Foreign Businesses
Lunar New Year is the most important Chinese festival celebrated at the turn of the Chinese calendar. It is also known as the Spring Festival, the translation of the modern Chinese name. Celebrations traditionally run from the eve to the Lantern Festival on the 15th day of the first calendar month. The first day of the New Year falls on some day between 21 January and 20 February. This year will be on February 8th.
The Lunar Year is centuries old and gains significance because of several myths and traditions in China. Traditionally, the festival was a time to honour ancestors. Chinese New Year is celebrated in countries and territories with significant Chinese populations, all over Asia. Chinese New Year is considered a major holiday for the Chinese population and has had influence on the lunar new year celebrations as well for all over Asia.
Within China, regional customs and traditions concerning the celebration of the Chinese New Year vary widely. Often, the evening preceding Chinese New Year’s Day is an occasion for Chinese families to gather for the annual reunion dinner. It is also traditional for every family to thoroughly cleanse the house, in order to sweep away any ill-fortune and to make way for good incoming luck. Windows and doors will be decorated with red color paper-cuts and couplets with popular themes of “good fortune” or “happiness”, “wealth”, and “longevity.” Other activities include lighting firecrackers and giving money in red paper envelopes.
This year the transition will be from the year of the goat to the year of the monkey.
Business Implications of Chinese New Year
It’s important to be aware that the effects of Chinese New Year will be felt much longer before and after February 8. It goes without saying that you need to ensure you have enough stock to see you through the holiday period, as manufacturers and ports close for days – so don’t miss the date for last-orders ! Meanwhile, as pre-festival production is increased to fill the ‘New Year gap’, and pressure on suppliers rises, the quality can suffer. Quality issues can then continue after the holiday as high employee turnover means that new workers have to be found and trained to replace those that didn’t return – meaning delays are also possible. It’s advisable to increase control and communication in the months before, and after, the holiday in order to minimize any potential mistakes and slow down the production.
Similar mistakes can occur in the shipping or logistics industries, so it is important to ensure that shipments are booked and at port well in advance of the shipment date. Most Chinese port areas will be closed completely or will be working in a limited capacity, so they are best avoided as much as possible at this time. During this period of the year, most facets of Chinese logistics are faced with a minimum staff as people return home, and transportation services can also become significantly more expensive.
To add to these difficulties, during the holiday no payments can be processed to and from China or Hong Kong. Often the most suitable solution is to make all payments before Chinese New Year, to avoid any potential problems with late payment fees.
It’s not just companies dealing in international trade that have to adjust usual practice to accommodate for the festive period. Any company doing business in China will have to be prepared to adopt local practices. At this time of year, red envelopes are often given in the form of a 13th month of salary, with double pay being issued to employees in January as a bonus for Chinese New Year.
Business Travel During Chinese New Year
With regards to business travel during the Chinese New Year, the general advice would be to reconsider. It’s not the best time to come to the country, and in most cases business travel won’t be effective at this time of year. Most businesses are closed, and it’s certainly not a period conducive to getting much done.
However, if a visit to China around this time of year is imperative, then be sure to take certain precautions. In particular, ensure that travel and accommodation arrangements are made well in advance.
In conclusion, being prepared for Chinese New Year from a business perspective will go a long way to avoiding any significant problems. This time of year in China may not be convenient, but handling the problems and opportunities that the festival brings in the right way can set your company apart from the rest.