Never has there been a more anticipated new year in modern history than 2021. The Christmas decorations seemed to make an early appearance as Australians looked forward to seeing out 2020 and ring in the new year with a fresh start. Soon after the new year resolutions have been cast aside, the Chinese New Year (CNY) will be upon us. If you’re an importer you’ll need to get busy long before the festivities begin.
Chinese New Year – Year of the Ox
The Chinese New Year falls on Friday, 12 February, 2021 this year. Each year the lead-up to Chinese New Year is chaotic. Importers around the world place orders to ensure they won’t run out of stock while their Chinese manufacturing suppliers are shut down.
Impact of Chinese New Year on Importers
CNY can cause headaches for importers but being organised can mitigate them.
Factory Shutdowns
Chinese New Year includes public holidays which give staff time off work to celebrate with family and friends. Almost every factory closes for seven days of public holidays but many factories remain closed for two to four weeks. Once factories reopen it can take them another two weeks to get back to full capacity as staff slowly return to work.
Importers should make contact with their manufacturers or import agent now to find out how long the factory will be closed. This allows importers to decide if they need to place an order to ensure they have enough stock to last. It’s most likely you won’t receive an order until March by the time the factory produces the goods after New Year and the shipment arrives in Australia.
Staff Movements
It’s not just the factory shutdown period that causes manufacturing delays. Factories can take many weeks to get back to peak production rates if they have lost skilled staff. The CNY period is notorious for staff not returning to their job. They may have received a better employment offer or decided to move and live in another region. Factories have no choice but to fill the vacant positions with untrained staff. Depending on the manufacturing process, it can take weeks or even months before new staff are proficient and the goods start moving out the door.
Shipping
Shipping prices work on supply and demand. The last quarter of the calendar year and January are the busiest for container ships. Between August and November, shipments of consumer goods leave China carrying goods for Christmas shopping. Between December and February, ships are filled with goods importers need to get through the factory shutdown period. During these months shipping rates increase as importers pay a shipping surcharge due to high demand.
This year the pandemic caused major shipping problems throughout the world. Some Chinese factories closed to reduce the spread of COVID-19. When they reopened and started manufacturing, there was a backlog of goods that needed to leave ‘the factory of the world’ China to all corners of the world. A shortage of shipping containers occurred and backlogs at ports.
It’s Not Just Chinese New Year - Other 2021 Holidays
Other Chinese public holidays can close factories for multiple days and cause manufacturing delays. While most Chinese public holiday dates are yet to be confirmed, the 2021 dates to be aware of include:
New Year’s Day - 1 January
Chinese New Year – Likely 11-17 February
Qingming Festival – Likely 4 April
Labour Day – Likely 1-3 May
Dragon Boat Festival – Likely 14-16 June
Mid-Autumn Festival – Likely 21 September
National Day of People’s Republic of China – Likely 1-3 Oct
Golden Week – 1-7 Oct
If you need assistance with sourcing a reputable factory to manufacture your products in China, call Vara Allied on 6115 0118 or contact us online.
