- With the Chinese New Year comes the shutdown of factories and companies for almost a month, delay in international shipments, and other consequences that can negatively affect your business.
Millions of people move between cities during the Chinese New Year celebration, paralyzing factories for about a month. Due to COVID-19, the commercial relationship with China has been complicated. Some companies stopped activities ahead of schedule; workers left production halfway, prioritizing reuniting with their families.
Did you plan your imports? You would have to wait after the Chinese New Year celebrations to resume your negotiations.
Guide for planning your imports before the Chinese New Year
- How does the Chinese New Year affect your imports?
- Avoid the Chinese New Year affects your imports
How does the Chinese New Year affect your imports?
Factories stop for almost a month
Due to the Chinese New Year, many companies stop their operations for almost a month. If not, they are at minimum capacity, filling orders slowly during the celebrations.
Main reasons for closure:
- Workers reserve their holidays for the Chinese New Year. To spend more time with the family, workers leave for two weeks or more. Some companies have employees on duty, but they are practically not operating.
- They let their workers go in stages. The workforce is divided; some leave a week before and the rest a week after, avoiding overcrowding of transportation and roads in China.
- Not all workers return. After the Chinese New Year, companies must deal with resignations by hiring new and inexperienced people. Facing slower production with higher quality problems, the new workers must train on the progress.
Logistics services decrease their offer
Logistics companies and customs also reduce their workforce considerably during the Chinese New Year. The decrease in the offer increases costs up to 16% and slows down their service.
After the Chinese New Year celebrations, the logistics sector will slowly return to normal. The low operation during this period generates a large number of containers waiting to be shipped. During the following months, shipments will be relatively slow.
China has experienced intense migration from rural areas to developing cities. Young people who go out looking for better opportunities return home for the Chinese New Year.
Transportation is at total capacity; collapsed due to the heavy traffic generated by the Chinese New Year. During 2018, there were approximately 30 million trips during the 40 vacation days. According to the Xinhua agency, China had almost 3 billion displacements during 2019. By 2021, they forecast a decrease due to the strengthening of preventive measures against COVID-19.
During the Chinese New Year, traveling by plane and train is recommended. For their higher prices, planes are the least used option, although international flights increase their demand considerably. The train is the most used transport by the Chinese; it has excellent communication around the country. It is safe, offers affordable prices and quite good services. For both cases, buy tickets in advance, one or two months before.
The most used apps to buy train tickets are WeChat pay and Trip.com; both have English options. When making your purchase, they issue an order number to show and print your tickets at the window. Print them out a few days before your trip because the lines on Chinese New Year seem endless.
Hotels and tourist attractions at full capacity
Hotels and hostels are fully booked from one or two months before the holiday period. The closer the date is, the more difficult it is to find a good place at a reasonable price. It is better to book in advance, at least one or two months before the trip.
Parks, tourist attractions, restaurants, and shopping malls will be bursting. The tradition is to spend time with family; large family groups are waiting to enter any place. Chinese New Year is not the best period to travel for business; everything becomes more complicated and expensive.
If you travel to China, apps like Trip.com and Dianping will be helpful to know the best places. Dianping is only available in Chinese, but it is pretty intuitive and useful. To use it, you can translate images from Google Translate or Pleco.
Avoid the Chinese New Year affects your imports
Prepare negotiations with China on time. Organizing and planning your purchases is the key to successfully passing the Chinese New Year.
1. Schedule your orders on time
Avoid supply delays, anticipate your needs and analyze production times. If a product has high demand in February and production takes 28 days, schedule that order from October or November to receive it in December. The closer to the Chinese New Year, the more difficult it is to deliver and ship your order. If you are looking for new suppliers now, contact them after the Chinese New Year. At least six months before the holiday season, so you will have enough time to complete your purchases.
2. Prepare your shipments in advance
It is not helpful to do production planning without having planned the procedures to send your merchandise. Plan estimated dates, collection, and customs procedures beforehand with the freight forwarder in China; so you can ensure a space to send your container without delays.
3. Maintain good communication with suppliers
Each company will close on different dates. It is essential to have a close relationship with the supplier: being informed will help you plan your orders better. Suppliers prioritize their best customers; to be on that list, pay on time, order periodically, have good production planning, and have good communication. Use WeChat to communicate with your supplier; it is more practical in China; the government blocks WhatsApp.
4. Do quality inspections
Always do quality inspections in China, primarily if your order arrives after the Chinese New Year. By having new staff, companies have more production errors. If you are a new customer or minor one, they will try to sneak them in; do not fill your warehouse with defective products. Many inspection companies can make these visits to your supplier.
5. Avoid scams
If a company plans to close its factory, it will do so during the Chinese New Year. Do not make payments on these dates, much less if it is the first time you work with that provider. Don’t risk your investment.
6. Prepare your trip with time
If for any reason you must travel during the Chinese New Year, make all your reservations at least one or two months in advance. Avoid unforeseen events during your trip at all costs because it will be difficult to solve them due to the situation in the country. Use mobile apps to buy tickets or schedule space in certain places; Trip.com and Dianping will be helpful. If you visit a provider, make sure they are operating. With Didi, you can schedule a taxi to move you around the city; download the Chinese version.
With good planning and a close relationship with your supplier, your negotiations with China will succeed. Get ready for the Chinese New Year and be the one who controls the international purchasing and shipping process.