Chinese New Years Dates and Factory Closures 2018. Why does it affect International business so dramatically?
Each year the Chinese New Years disrupts business and lives like no other holiday on the planet. Imagine Christmas, Hannukah, Ramadan and Thanksgiving all rolled into one 3 week long bender and you get CNY.
Factory Closures January 27th- Feb 20th 2018
“Promo Crunch and Promo Motive deals direct with factories in China to deliver unique promotional products. Each year the world’s largest holiday throws a wrench into business and trade around the world. Here is a clear and concise explanation.”
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Chinese New Years 2018
The reason and facts about Chinese New Years are unknown to many of here in the West…so this blog post will give you a simple explanation which might help you to explain to your customers why the holiday is so disruptive.
1) China is the most populous country in the world with 1.25 BILLION people. That is 4 times the population of the USA living in about the same area as the USA. It is 40 times the population of Canada!
2) Most people in China work in TRADE ZONES….these are large industrial areas (such as Shenzhen) . A TRADE ZONE is where cities and areas were built 30-40 years ago by the Chinese Govt to concentrate certain types of industry in one area. Shenzhen is electronics.
3) 35 years ago Shenzhen had a population of 100,000 people, mostly farmers. Now, Shenzhen is a city of 25 million with 100 Million living in the surrounding area. The total area of Shenzhen is about the size of Southern California from Los Angeles to San Diego!
4) Most people living in Shenzhen (and the other major centers) have moved there from the country-side of rural China…… If you were to look at Miami on a USA map…or Newfoundland on a map of Canada…think of that as Shenzhen….then think of Seattle in the USA or Whitehorse in Canada and imagine that many people living in Shenzhen originally come from Seattle or Whitehorse (or somewhere along that route).
5) Come Chinese New Years…(or close to the actual holiday)….100’s of millions of people (yes 100’s of millions) get on the train or in their cars and go home……most cannot afford to fly home (domestic airlines are expensive) so they drive for 2-5 days or train for the 3-4 days….just to get home for New Years.
6) The best way to think of this is imagine EVERYONE in the USA leaves work and gets in their car or takes a train to travel a minimum of 500-1000 miles. That is a pretty close idea of the chaos!
7) Once they get back home, (after 2-5 days of travel) about 15% of the all of the people who went home for the holiday…DO NOT RETURN…..they don’t phone in and say they are not coming back…they just DON’T RETURN!
8) So….after the holidays…employers are scrambling to get new employees to fill the roles of those who did not return. There is even a NEW business that has cropped up after the holiday to capture the returnees……Job Catchers…these are people who stand at the train stations and ask returning workers A) What do you do?..and B) How much do you make?…..They then offer these returnees (right there and then) another job at a better wage..(and then drive them to the new factory or place of work)….a full 5-7% of people returning back actually start a NEW JOB!
9) The actual holiday is Feb 16th in 2018, but it effects are felt well in advance and well after the holiday….and oh yeah…almost forgot…
10) In September and October (9 months after CNY) there is a baby boom….spouses who have not seen each other except for CNY get pregnant and then in the Autumn the woman goes home to have the baby….
So…..next time a client asks you why………send them this blog…..and it will help….