Business implications for the Chinese New Year period

The date of the festival changes each year as it is determined by the Chinese lunar calendar, and thus normally falls in late January or early February.

Even though the official public holiday period only lasts a week, the preparation, holiday atmosphere and the extended celebrations can last for almost a month, starting two weeks before CNY. 

This naturally can have implications for doing business in China during Chinese New Year.

Almost every local business and company will close during this period. Corporations, factories, logistics, banks, assemblers are shut down completely. This is especially apparent in tier 1 cities - Beijing, Shanghai, Shenzhen, Guangzhou. Businesses commonly close early to allow staff to travel across China to be with their families for the Chinese New Year period.

Doing business in China during Chinese New Year 

Business in China typically slows down in the week leading up to Chinese New Year. Note that this occasion is not only celebrated in China, and will also affect Australian businesses dealing with markets in SE Asia and elsewhere.  

In terms of the impact on Australian companies doing business with China, there are a few things to be aware of:

• Ensure your shipment arrives in China at least two weeks before CNY to ensure it is not held up during the holidays.

• Try to avoid placing orders during the one month closure.

• Avoid trying to settle a contract or negotiation around this period.

• Try not to make deposit payments prior to CNY as manufacturing will not resume until after the holiday period.

• Order imports from China well before Chinese New Year to avoid shipments being held up during this period.

There will always be a handful of agents, manufacturers and businesses’ claiming to be open during CNY, but this is generally untrue.

Business etiquette during Chinese New Year

Consider the week or so around Chinese New Year to be similar to that of Christmas and New Year’s Eve in the west. 

While there may be some people at work, most industries will largely shut down, and only have a skeleton staff on hand if absolutely necessary.

In general, it is best to plan around this time and assume that work orders will not be filled, manufacturing will slow or stop completely, and imports and exports will be held up at customs for weeks.

What you can do is remember that business gifts at Chinese New Year are common. Opt for gifts that are red or gold in colour - especially red envelopes - and avoid giving anything (such as monetary gifts) in odd numbers.