Chinese New Year

Chinese New Year: The Ultimate FAQ Guide

I know you’re wondering how Chinese New Year will affect your import from China business.

That’s why I will answer all questions you have about Chinese New Year.

So if you want to learn more, read this guide.

What is Chinese New Year?

 Chinese New Year Celebrations

 Chinese New Year celebrations

The Chinese new year is also popularly known as the Lunar New year.

It is a date in the Chinese traditional lunisolar calendar that marks the beginning of a new lunar year.

According to the traditional setting, the festive was meant to honour the ancestors of the Chinese culture.

However, with the evolving world, the Chinese New Year has become festive that serves to bring people together.

When is Chinese New Year?

Normally, the Chinese New Year falls in between January 21st and February 20th.

The actual dates usually vary from year to year. For 2021, the Chinese New Year fell in 12th February on a Friday.

Nonetheless, these celebrations do not hinder the Chinese from celebrating the January 1st global new year.

This is after the Chinese adoption of the normal global calendar back in 1912.

Why is CNY such a Big Deal?

The Chinese New Year is a symbol of unity and togetherness that is quite uncommon in the present era.

Thus the Chinese act of maintaining this festive season plays a majorly in terms of strengthening family bonds.

Initially, the Chinese New Year served traditional purposes.

The Chinese New Year originates from the ancient Shang dynasty people.

How long do the Chinese New Year Celebrations take?

Altogether, the Chinese New Year festivals last for 16 days including the eve of the New Year.

Usually, the festival is meant to last until the next full moon appears which is usually after 15 days.

The 15th day marks the first full moon right after the spring festival.

The Chinese refer to this as the “Yuan Xiao Jie’”, which means the first day of the full moon.

The lantern day festival marks the end of the Chinese new year festivals.

What is the Impact of Chinese New Year on my Supply Chain?

The Chinese year celebrations are certainly one of a kind.

For the Chinese people, the New Year is a time where all the time and attention is redirected to family and friends.

This translates to businesses being shut down for the period.

China being a global supplier of products across the globe, this time of the year creates massive inconveniences in the market.

The shutdown is nationwide, except for extremely prioritized goods and perishable goods.

Even government offices and operations cumulatively join in to partake the celebrations.

The silence from the Chinese market lasts between two to four weeks.

This silence has an enormous impact on the supply chain of the market both internally and externally.

Impact of the Chinese New Year on Internal Supply Chain of the Country

The Chinese new year accounts for the largest ever migration in the country.

This is because most of the family members and relatives are situated in rural areas.

The main agenda of celebrating the New Year festival being mostly family reunions, most Chinese nationals are travelling.

Hence the transport industry is mostly flooded during this time.

Preparations for the events require a lot of materials.

From food ingredients all the way to the decorations such as fireworks, firecrackers and lanterns.

All these materials need to be put together.

Hence the factories and manufacturing agencies in charge are really experiencing a high demand which increases the supply of these products.

Impact of the Chinese New Year on the Supply Chain of the External Market

The external market in this category represents the global market.

China is the leading exporting country across the globe.

With China bagging more than 1.3 billion manufacturers, them being on a three-week break will affect the global market.

Therefore, the Chinese New Year can result to grave inconveniences to businesses dependent on the China supply.

Many people have become aware of this event and have taken up precautionary measures to counter the drawbacks.

Does China Shutdown during the Chinese New Year?

99% of factories in china close down during this time. In fact, closing up shops begins to take place 10 days prior to the actual event.

This is to allow for working staff ample time to make travel arrangements to the rural regions.

The time frame for normal resumption of work might take longer as the factories prepare to have received back their workers.

Majorly the shutdown is effective the first seven days into the festival. However, some businesses extend the days to accommodate a flexible re-opening time.

Compared to other national festivals like that of Vietnam and Tet holiday, China Shutdown period takes longer.

What Happens before the Chinese New Year Holiday?

 Chinese New Year

Preparations towards the Chinese year usually begin long way before the day.

Businessmen are in fact the busiest with keeping their clients up to date on the upcoming event.

Follow ups on ordered goods are keenly taken into consideration months before the Chinese Year begins.

This entails sending invoices to clients to give an early notice on the incoming Chinese New Year.

Months before the CNY, most of the supply factories halt their production procedures.

Additionally, any pending orders for clients are ensured that they get to them before the beginning of the CNY.

Meanwhile the employers and employees in the factories are winding up to get ready for the festivals.

During this time is when most of the employees get most of the work done in order to receive enough incentive to serve the holiday.

Hence deliveries will be hastened in order to receive more incentives.

This is possible because during this time the demand of products is usually high hence the incentives will be on the high.

Chances of experiencing quality hitches are very high during this time.

This is because of the hurriedness from the suppliers to deliver and get as much incentive as possible before the festivities begin.

Travel arrangements need also to be put in place following the expected massive migration.

The travel industry in China is thus at a boom during this time.

Consequently, decor activities are put in place to avoid any inconveniences at that time.

Factories that specialize can date their customers back in the ancient times when the new year began.

Do Factories Outside Mainland China also close during Chinese New Year?

For countries like Malaysia, Indonesia, North Korea, Singapore, Vietnam, and Brunei, they have similar festivities like China.

However, they differ in the time length.

The shutdown from mainland china during the festivities affects neighboring countries.

As a result, these countries as well go for a break although it takes a shorter period for them.

Most Chinese factories will reopen after the official days for taking a break.

Hence the short break from factories outside mainland china.

Which Industries get Affected by the Chinese New Year?

Nearly the entire market suffers the impact of the Chinese New Year.

However, some industries experience a positive impact.

Siting the Travel industry in China, following the massive number of people migrating into the rural region, the industry income is good.

Moreover, the manufacturing and supply industries take the advantage of providing these supplies.

However, when it comes to the imports and exports industry, most of the factories are unable to deliver.

Without the laborers, the production and supply cannot go on.

Hence for those clients waiting from imports from china, they will experience delays in delivery.

Usually up to the time when the festival is over.

Overall, the manufacturing industry stands to be the most affected industry by the Chinese New Year festivals.

Do Freight prices increase during CNY?

For the very obvious reasons, freight rates usually go up towards the dawn of the Chinese New Year and partly after.

For any businessman, this is an opportunity that is there for grabs.

Due to the nature of the festival, that is, the almost month-long vacation, apparently demand is high.

This is both in the country and outcasts.

Ahead of the celebrations which usually occur towards end of January and mid-February suppliers receive massive orders.

This serves the business people, who mostly make the orders, the advantage of having enough stock at the time of the holiday.

Following the high demand, freight rates tend to also be high.

Remember the laborers are looking forward to earn as much incentive as possible to last them the festive season.

Do all Countries in Asia Celebrate the Chinese New Year?

Asia houses a number of Chinese nationals. As a result, the country is subject to celebrate the occasion like fellow Chinese members.

The East Asia especially the south east part of Asia is very active during the Chinese New Year.

Countries such as Thailand, Indonesia, Malaysia and even the Philippines actively engage in the Chinese New Year celebrations.

Why does Shipping from China Cost more during Chinese New Year?

Loading containers at the port

Laoding containers at the port

Price changes are subject to the change in demand in the market.

As earlier outlined, the Chinese New Year is accompanied by more demand of products as china still stands as the world’s top exporter.

The need for importers to have enough stock during the vacation creates a demand in the market.

Consequently, the suppliers who are getting ready for the festive season will need to pocket enough to last the almost month-long vacay.

The chaotic rise in demand bombarding with the festive season serves as an opportunity for most suppliers in China.

Hence the rise in shipping freights during this period.

How can I Beat CNY Season Prices?

The CNY season prices always get most of the importers unaware.

This is because the dates to the actual festivals usually differ from year to year.

The price changes during the CNY season are hard to adjust.

The price increase usually increases by 50%.

According to the Chinese, the price increase usually serves as compensation for the long vacations that most workers attend to.

The only way to beat the prices will be to make purchases to cover your stock needs earlier in advance.

However, change being an inevitable factor, you might end up pilling a stock that might not meet your customer needs.

However, there are preparations you can undertake to help you during the price changes in the CNY season.

First and foremost, ensure you are working with a credible and trusting manufacturer.

This goes a long way in ensuring your goods arrive on time and are of good quality.

Always plan ahead. This is one sure way of evading the surging prices in supplies as a result of the Chinese New Year.

Take an account for your inventory.

Comparing it with the previous serves a long way in ascertaining what you require and make earlier preparations as a result.

Prepare a solid plan to help you counter the CNY prices.

This majorly depends on the manufacturer and supplier you will be working with.

Some manufacturers can give biased information to take advantage of the profits that come with increased prices.

How do I Prepare my Shipments for Chinese New Year?

 Container freight station

Container freight station

There is every reason for an importer to be worried on how his shipment will arrive amidst the Chinese New Year season.

Spaces are limited and delays are bound to happen due to congestion.

However, there are few guidelines that can help you prepare your shipment during the spring festival season in china.

Keep in Touch with your Manufacturer

This allows you to easily get updates on the production activities in the factory.

As you are now aware, it reaches a point that production processes in china halt in preparation of the festival.

Most workers take an early leave to make travel arrangements for the occasion.

With no workers in the factory, production halts.

Make Early Bookings for your Shipment

Freight forwarder come in handy during such times.

They can easily give you a schedule on reserved spaces.

It is advisable if possible to make arrangements a month earlier to the Chinese New Year.

Opt for the Multimodal Mode of Transport

A lot of importers will certainly opt for transport means offering faster transit time.

Choosing multimodal transport, where you incorporate several modes of transport from air, sea, road and rail.

This is because as multimodal transit is less likely to be full.

You can confirm this with your freight forwarder.

However, it might take longer for your goods to arrive.

Nonetheless, it is more cost-efficient, especially during this season.

Incorporate Partial Truck Load in your Bookings

Not only will this save you from truck fees, but will also save you from the effects of congestion as well as long transit time.

With the partial truck load, you easily evade the stops ate the terminals.

Be keen to Receive the Cargo Earlier than Expected

With the early bookings you have sought for, then there is a possibility for your cargo to arrive early.

This is quite possible especially with the Chinese new year is around the corner.

Do China Customs Work during the Chinese New Year Holidays?

China port customs are available regardless of the holidays.

However, for this particular season, some customs regulators also take a break from their duties.

Majorly there are three known days as off days.

Nonetheless, in accordance with a defined holiday procedure, the customs maintain a few workers to help during the holidays.

Hence this explains the long processing times.

For the small ports, they take a week’s day off while the freight forwarders take a two week leave for the vacation.

What is the impact of Chinese New year on Customs clearance, and freight forwarding?

Customs clearance and freight forwarding agencies experience disruptions as well.

The Chinese new year`s impact is one that cuts across a lot of companies.

Freight forwarders experience a high demand of their services right before and after the Chinese New Year.

The same applies to the custom clearance offices.

How do I Ensure my Shipment Gets through Customs Standstill during CNY?

There are a few guidelines that will make it easier for your shipment to get through customs standstill during the festive season.

  1. Ensure you are not shipping restricted goods. They suffer the consequence of delays due to approvals.
  2. Ensure you package your items correctly. Wrong packages usually suffer being set aside hence more delays.

The above factors depend on both the parties involved.

What are the Chances that My Order will be Finished before CNY?

It all depends with the production process of your manufacturers and how big your order is.

However, time is a factor considering its towards the CNY.

However, detailed information can be assessed from your manufacturer.

It is important to maintain communications to be aware.

What Can I do if My Order is not Finished before the Chinese New Year?

Making a follow up with your manufacturer is highly recommended.

Thereafter, clear guidelines will be put forward.

However, you should be ready to probably receive your cargo post the CNY festivities.

Which factors Influence Factory Production Lead-times during Chinese New Year?

 China warehouse

China Warehouse

Experience and Production Planning Skills of the Factory

This one of the major factors that gets to differentiate regular factories from top notch factories.

With proper planning of the materials for production, the menace caused by the CNY can easily be evaded.

Factory Order Books

This is usually well known to the factory.

The number of orders received by a factory directly affect the ability of the factory to deliver.

A factory with a load of orders is bound to experience delays in terms of delivery, especially if it’s during the CNY season.

Number of Components/Raw Materials

It all depends on how complex your product is.

For a very complex product, the raw materials required will determine on how fast it can be made available.

The process of production is a great determinant when it comes to how fast your product can be completed and made available.

Defect Rate and Factory’s Attitude towards Defects

One of the very reasons as to why products come with warranties is to assure of the quality of product. However, defects are sometimes inevitable.

During the CNY, due to large demand in the market, Chinese suppliers do things hurriedly in order to be on the same timeline as the buyer.

As they strive to achieve these, defects are bound to happen.

In fact, it is during the CNY season, that the defect rate shoots.

Usually factories with good credibility on the production sector welcome defects and are willing to fix.

Size of Factory/Warehouse

Size matters especially for the futuristic factories.

Factories with an accommodative and large warehouse space are able to offer storage spaces for their products.

This comes in handy especially when the factory decides to make a massive production for a certain product which is expected to be in demand.

Size does matter when it comes to offering space to the products from the supplier.

Financial Strength/Cash Flow of the Factory

Last but not least, the cash flow in a factory has an impact on the production.

For a factory that has sufficient cash flow, purchasing raw materials for next production is made easy.

Moreover, it becomes easy for the factory to easily pick up from where it left after the CNY festivities.

Does CNY affect small quantity importers?

Yes. If you make an order that is of small quantity, best assured that your cargo will delay.

This is because most factories around this time work with the orders in bulk as a priority.

Not only do they come with more incentives, but they help reduce the workload following post CNY festivities.

How do Factories in China Prioritize Orders in Preparation for Chinese New Year?

A number of factors affect whether your product will among the priorities or not for production;

The Volume of Order

Simply highlights the buying power of a client. Clients with a high volume of order tend to receive first priorities compared to the latter for obvious reasons

Relationship with the Manufacturer

This is where the dinners and good rapport pay off. You are at an advantage of the relationship with your manufacturer is solid.

Physical Presence in China

This just makes it easier since you as a client, can make physical visits to the manufacturers office and mount pressure for the production.

It works wonders since the factory will want to maintain its credibility to its customers.

How do I Choose the right Shipping Partner to avoid Frustrations during CNY?

The right shipping partner especially during the CNY season will go a long way to delivering your goods.

So for this less stressful shipping, it is best to opt for the big shipping companies in the market.

Shipping agencies that have made strides to grow come with great service delivery to their clients although a bit pricy.

Foregoing the cost to the safety of your goods will be a better choice, rather than cheap and later losing your cargo.

International shipping partners serve best due to their vast range of resources.

Local shipping agencies are yet to help you during this strenuous Chinese new year season.

Is it Advisable to Pay Suppliers just before CNY?

No.

Avoid making payments for your products days to the CNY.

Most factories once they go on holiday usually close down and do not come back.

Hence the risk of losing money.

Further, there is no guarantee that you will be given priority once business resumes just because you have made a deposit.

Why is the risk of Quality issues higher during CNY?

One of the major drawbacks of making an order during the Chinese new year is the possibility of low quality.

This is true following the below factors;

Lax Internal Quality Control

This is caused by the rising need for the factory to make deliveries on time, and the need for workers to increase the pay.

Both these priorities lead to the result of quality issues

Subcontracting

With the high demand for goods, some factories just do not accept nos.

As a result, they look for another factory to help out under certain terms.

The problem is the company with the subcontract might not be fully aware of the procedures to follow hence possible defects.

New Workers

Post the CNY celebrations, most workers do not report back to their original work stations.

This prompts the factory to make use of new workers.

With the high demand in place, the factories do not have quality time to train their workers.

Hence with the unprofessional labour in place, defects are quite inevitable at this point.

Unfixed Quality Defects

During shipments, the products usually go through detection at the ports.

The buyers are made know of the defects and due to the rising need, prefer to take the goods as they are.

Can Samples, Prototypes and Negotiations still be Conducted as Normal during CNY?

Yes. This allows the manufacturer to give you details on whether they can deliver the product within the CNY datelines.

Negotiations allow room for clearer and more honest feedbacks concerning your product and how soon you can get it.

Further if it falls in the duration of the CNY the manufacturer enlightens you on the way forward.

Can there be Scenario where Production would not Conform to Samples Ordered before CNY?

Yes. The probability of having something different from the earlier sample is high.

This is due to the hurriedness of product delivery to clients and the need to attend the CNY celebrations.

How do I Ensure Quality Control before and after Chinese New Year?

Ensure the manufacturer you are working with is well certified and adheres to regulations of quality control

Another way is to look into the restrictions outlined by the manufacturer.

The stricter the restrictions the more efficient they are in quality control.

This entails tracking your goods to ensure they arrive on time and to the designated client.

What Can I do if I Need my Shipment to Leave China before CNY?

Earlier bookings go a long in ensuring you receive your shipment earlier in advance before the CNY.

This is made possible by liaising with your manufacturers to give you updates on their production.

Afterwards booking with a direct shipping allows you to receive your shipment earlier even before the CNY begins.

It all calls for a detailed planning on when you place your order and the time to receive it.

Do Ports also Close during Chinese New Year?

No. Ports remain operational during the CNY but little personnel on board.

Should I ship by Air or Ocean during CNY?

Air freight and ocean freights are not directly affected by the CNY.

However, the CNY freight forwarders usually take a leave for the holidays hence your cargo will remain at the warehouse.

Why should I Avoid Trans-shipments during Chinese New Year?

 COSCO Shipping Lane

 COSCO Shipping Lane

Trans-shipment is cheaper than direct shipping and it is bound for most shipping agencies to opt for this.

However, your cargo risks being rolled twice.

According to most people, this is sort of not worth it.

Opting for direct shipping is most advisable especially during this season.

Why is Cargo Insurance Particularly Important during CNY?

This is important especially if you are dealing with cargos in the Chinese New Year season.

With a lot of orders in place and a lot of them under shipment, chances of getting lost are high.

The congestion creates confusion which bring unforeseen drawbacks.

Having a cargo insurance on standby helps you reduce the damage and easily recover your money in case of such misfortunes.

Should I Avoid Importing Restricted Items from China during Chinese New Year? Why?

Yes.

You should definetley avoid purchasing restricted goods especially if you do not have the right certifications to cover you.

The delay during inspection takes longer hence delays in your goods.

It is most likely the approval will take place later as the priority will be more lenient on the legal goods.

When is the Best Time to Visit my Supplier in China before CNY?

Months before the eve of the CNY begins will be perfect to make a visit to your manufacturer.

However, if your schedule does not allow, it is best to await the CNY to be over.

What are the Consequences for not Preparing your Shipments for CNY?

Delays and even failure of delivery for your shipments are quite possible.

Most of the manufacturers will not be available to help you follow up hence the very reason you should make shipments arrangements.

What are the Other Chinese Holidays I should be aware of?

 Chinese New Year

 Chinese New Year

Other than the CNY, china has other six major public holidays.

These are

  • The new year for January 1st
  • The Tomb sweeping day
  • Labor day
  • Dragon Boat festival
  • Mid-Autumn festival
  • The National day

The other major long holiday in mainland china is the Golden week which runs from 1st to 7th October.

What Should I do if I Run into Shipping Issues due to Chinese New Year?

Shipping issues are usually caused by the congestion in the shipments due to the massive orders.

Having an insurance on standby saves you a great deal.

Moreover, it is important to get in touch with the shipping agency you chose and get full details concerning your shipment.

What is the Usual CFS cut-off during Chinese New Year?

CFS cut-offs usually take place due to the warehouses closures.

It happens due to the lack of workers to manage the warehouses during the celebrations.

Do Product Prices in China change post CNY?

Yes. Products prices will go back to their normal prices but not quite immediately after the CNY.

Most manufacturers adjust their prices when the demand of their products go down.

Does Chinese New Year also Affect Shipping from Alibaba and other Chinese Ecommerce Sites?

Definitely. In fact, most eCommerce platforms in china experience a boom in sales following the increased orders during the festive season.

The impact is usually positive on these platforms due to the increased orders.

When does Business go Back to Normal after the Chinese New Year?

With the holiday lasting to about four weeks, one can only hope to be patient until holiday is over.

Normality starts setting in immediately after the four weeks from the day of preparation to the day workers completely return to work.

At BanSar, we will help sort all freight forwarding needs from China.

Whether you want to handle customs clearance, China warehousing or any form of shipping from China – BanSar will handle everything for you.

Contact us now for all your freight forwarding needs.

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