• Chinese New Year 2021 : How Importers Can Prevent Disaster

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    The Chinese New Year (CNY) of 2021 starts on Friday, 12 February, and officially lasts for 7 days in Mainland China. While many of us who work in Asia are painfully aware of the Chinese New Year, and the coming disruption to all production, many importers and Amazon sellers are caught completely off guard.

    As if the rush to get your shipments in time for Christmas was not enough, you now have to make sure that your goods are ready well before your supplier closes the shop for CNY 2021. During this holiday, all factories are shut down, without exception. This year we also have the COVID-19 factor to take into consideration.

    While the official holiday only lasts for about a week, most factories are closed for an entire month, with disruptions lasting even longer. This time of the year is especially risky for businesses importing seasonal products, such as outdoor furniture and swimwear.

    Article Overview

    • How importers can prepare for CNY
    • Why and how CNY disrupts manufacturing in China
    • How to avoid delays to the CNY
    • CNY 2021 timeline and dates
    • Lunar holiday disruption in Vietnam and Southeast Asia
    • How COVID-19 may impact CNY 2021

    1. Production is halted one or two weeks before the Chinese New Years Eve

    While the Chinese New Year Eve is set on Friday, 12 February 2021, all suppliers start to wind down operations one to two weeks in advance.

    As such, the CNY puts a halt to mass production, and even sample orders, far earlier than many buyers anticipate. This is not always in your supplier’s direct control. One component and materials subcontractor closing doors a few days earlier can essentially result in an unexpected and early shutdown of the supply chain.

    This partly explains why different companies close their doors on different dates. Get confirmation on their schedule well in advance to prevent delayed orders.

    However, administrative functions tend to be operational a week or two longer, than the production lines. As such, you can, at least, save some of the runways on sample development and contract negotiations, that may take place at this time.

    2. Production is halted for at least two weeks after the Chinese New Years Eve

    While the official holiday is only lasting for roughly 5 working days, plus two weekends, most workers remain in their home provinces for an extra week or two. This explains why most suppliers are not back in business until two, sometimes even three, weeks after the Chinese New Years’ Eve.

    You will have a hard time getting in contact with any company representatives, including the salespeople, on CNY eve and the following days.

    However, they will most likely be available to handle administrative tasks within 5 to 7 days. Don’t hesitate to contact them at this time frame.

    CNY 2019 Plan

    3. Getting operations back to normal can take up to a month (or more)

    Eventually, everything gets back to normal. Hopefully. The truth is that many manufacturers struggle to get back to a normal mode of operations in the weeks after the Chinese New Year.

    The primary reason for this being workers who simply don’t return to their former employers, without any prior announcement.

    Depending on the number of workers departing in secret, it can cause severe disruptions across the supply chain. Finding, and training, a new batch of workers provides new challenges of its own. Skilled workers are, to a certain degree, replaced by rookies.

    This is one, of two reasons, why the risk of quality issues is at its peak right after the end of the Chinese New Year. Every trade takes its own time to master.

    This is just one, of many reasons, why you should never relax your quality assurance and inspection procedures. The other reason for an increase in Post-CNY quality issues, as hinted above, is the large number of orders a (moderately successful) supplier, and its subcontractors have stacked up.

    This may include a backlog of orders from early December and onward, depending on the production time needed. This is stretching the suppliers’ capabilities to its maximum.

    Plenty of suppliers, even those who are not so busy, just use the general Post-CNY stress as an excuse for being slow and providing poor.

    4. How to avoid severe delays due to the CNY

    Now that you are aware of the somewhat complex dynamics of the Chinese New Year, and how it may affect your business, it’s about time to explain how you can prevent related delays and quality issues.

    a. Place your orders in time: Ensure that production starts in late November, at the latest. That assumes an average production time of 30 to 40 days. If longer, you must start counting backward.

    Counting on tight schedules is never wise, so make sure that you confirm when your supplier halts production and accept new orders. Try to have a minimum 2-week buffer between the end date of the production, and the date they close.

    b. Avoid placing last-minute orders in January: Remember what I mentioned about the risk of quality issues Post-CNY? The same applies to the January rush, leading up to the CNY.

    Never place orders at this time, as the goods will most likely not ship on time while the risk of quality issues increase.

    c. Keep things moving forward, to the extent possible: While production halts relatively early, sales, engineering, and administrative departments are more flexible.

    Hence, you can move forward with due diligence, price research, sample orders, and negotiations as usual.

    d. Don’t make deposit payments prior to the Chinese New Year: Some suppliers never open again. If they do intend to shut down, they’ll most likely do so at the time of the CNY.

    5. CNY 2021 Timeline

    Notice that this is a rough timeline. Ultimately, it depends on the suppliers’ schedule.

    November 1st: Confirm when your supplier is closing and reopening for the CNY

    December 7th: Last day to place an order for delivery before the CNY (assuming a 35 – 40 day production time)

    January 15th – 22nd: No new orders are started (all new orders will enter production after CNY)

    January 29th: Some suppliers and subcontractors stop production, causing disruption in the supply chain

    February 5th: Most workers have already left the factories. Sales reps, engineers, and management may still be around for a couple of days

    February 9th: All personnel has left the factory (including sales reps and managers)

    February 12th: Chinese New Years Eve

    February 22nd – 26th: Most sales reps and engineers are back in the factory, or at least respond to emails and calls. Some factories resume production

    March 1st – 5th: Most factories are now operational and production resumes

    6. CNY Dates

    Unlike the Gregorian New Year’s Eve, which occurs on the same date every year, the Chinese New Year begins and ends and various dates in the calendar.

    The earliest date is January 21 and the latest date is February 20. Below follows a list of the CNY dates for the coming years:

    • 2019: February 5
    • 2020: January 25
    • 2021: February 12
    • 2022: February 1
    • 2023: January 22
    • 2024: February 10
    • 2025: January 29
    • 2026: February 17
    • 2027: February 6

    How COVID-19 Impacts the Chinese New Year

    In order to assess the COVID-19 impact on CNY 2021, we only have last year’s holiday to compare to. COVID-19 became public knowledge just around the time of CNY 2020. We were very concerned about whether factories would be able to reopen after the Chinese New Year. However, the disruption was more limited than expected, as most suppliers started to operate starting in March 2020.

    You can also read the COVID-19 report that we kept updating in early 2020.

    So, what does this tell us about the COVID impact on CNY 2021? Almost nothing. Unless we see other major outbreaks in Mainland China, we can expect most factories to resume production as usual. It’s also important to mention that the Chinese authorities have implemented a strategy of local measures – meaning that they implement short-term restrictions in certain areas.

    There is a risk that some outbreaks could be caused by workers traveling across the country, which in turn would trigger local measures for a week or two. That said, I think it’s unlikely that we will see any major disruptions as factories resume production post-CNY 2021.

    Questions & Answers

    How long is the CNY 2021 factory shutdown?

    The official holiday only lasts for around a week. However, the total downtime is around a month when you factor in the pre-CNY factory closures and the fact that most workers are not back until the 3rd week after CNY.

    Is every single Chinese factory closed during the Chinese New Year?

    Yes, all factories are without exception closed down during this period.

    Asking a supplier to keep production going during the CNY is the same as asking you to work on Christmas eve. While some of us still do that, it’s not something to be expected. It’s also a public holiday, so the factory cannot force their employees to work at this time.

    Do Hong Kong-based suppliers also close for CNY?

    The Chinese New Year is a public holiday in Hong Kong, just like in Mainland China. However, most companies only close for a few days, rather than weeks.

    That said, Hong Kong-based companies have their manufacturing facilities in Mainland China, Vietnam or other countries in the region. As such, they face the same disruption as everyone else.

    Does the CNY affect ocean and air freight?

    Ports remain operational during the CNY. That said, freight forwarders are closed during the CNY for at least a week. Further, they cannot pick up products that are locked up in the factory warehouse until their employees are back. Yet, the CNY is not disrupting ocean and air freight to the extent it does with manufacturing.

    Why are the factories closed for so long?

    Chinese migrant workers traditionally had to spend days returning from factors in Guangdong, Zhejiang, Jiangsu, and other provinces, to their hometowns in China’s inland. While the journey time is significantly shortened by high-speed trains and low-cost airlines – the tradition for workers to take a long holiday around the CNY still remains.

    It’s also their only major holiday for the entire year. By comparison, there is no summer holiday in Mainland China (or most Asian countries for that matter). Might as well stay in an air-conditioned office or factory during the Asian summer.

    That being said, the general trend is that the CNY holiday is becoming shorter. Chinese manufacturers understand that this is a major disruption for both them and their customers. Many suppliers are also perfectly aware of competition from other countries in the region and how a month-long supply chain disruption is not exactly a big selling point. My best guess is that factories will limit their closure to around 2 weeks in the coming years.

    Do all countries in Asia celebrate the lunar new year?

    The lunar year holiday is celebrated in Vietnam (also called Tet), and in the Chinese communities in South East Asia, mainly in Thailand, Malaysia, Singapore, and Indonesia.

    As such, the lunar new year is directly impacting businesses importing products from China and Vietnam.

    That said, manufacturers in Southeast Asia, Japan, Korea, India, Europe, and the Americas also procure materials and components from suppliers in Mainland China, and to a lesser extent from Vietnam. As such, the CNY and Tet do have a major global supply chain impact – far more so than any other holiday or celebration in the world.

    When is the last day to visit a supplier before the CNY?

    I suggest that you go at least one month in advance if you really have to go before. As many suppliers don’t accept new orders (even for samples) in the weeks before CNY, you might get more done if you visit them once they open again.

    That said, you can still negotiate contracts, and get feedback on your specifications before they close.

    What will happen to my products if they are not finished before CNY?

    Your supplier will either resume or start production once they are back in the factory again. How long it’ll take to finish production depends on how far they made it before they closed the factory prior to CNY.

    Should I pay my suppliers before the CNY?

    No, you should not pay your supplier shortly before they close before CNY. Many suppliers that are about to go out of business, tend to close down permanently at the time of the Chinese New Year.

    It’s also not unusual that key employees leave the company, which can be almost as disrupting as if they cease operations.

    Further, once they start production again, you should not take for granted that they will process your order faster simply because you paid the deposit before CNY.

    Why is the risk of quality issues higher post-CNY?

    After the CNY, a significant percentage of the workers don’t return to their factory. Instead, they look for employment in their hometowns and provinces.

    As such, the factories need to bring in a new batch of untrained workers each year to manage the post-CNY surge in production. A large production volume combined with poorly trained staff is a potent mix that often results in severe quality issues and misunderstandings.

    Whatever you do, don’t cut down on quality inspections in March, April, and May. Then again, you should not be cutting down on quality inspection at any time of the year.

    What are some other holidays we should be aware of?

    Other than the Chinese New Year, the only big holiday in Mainland China is the Golden Week from October 1st to 7th.

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  • 24 Responses to “Chinese New Year 2021 : How Importers Can Prevent Disaster

    1. Amazon FBA Blogs - My Top 6 Amazon Seller Blogs - eBusiness Boss at 12:30 am

      […] My favorite blog post to date was one that covered the impact of Chinese new year […]

    2. Carrie at 12:49 am

      So, what are your predictions now that Bejing is on lockdown?

      1. Fredrik Gronkvist at 7:43 pm

        Hi Carrie,

        Beijing is not under lockdown. So far, only Hubei province is under lockdown.

        I read this on SCMP:

        “In a 10-point circular published on Sunday, Beijing’s municipal authority ordered that check points be established to examine body temperatures and only residents’ vehicles be allowed into each community. A complete lockdown could be imposed on the area if a confirmed coronavirus case was discovered.”

        Link: https://www.scmp.com/economy/china-economy/article/3049847/coronavirus-prompts-beijing-residential-lockdown-millions

    3. edward klingler at 1:58 am

      Thanks for all the info, Seems I have done everything you said not to do – Given a deposit to start my sample, not knowing that CNY was to start, possible quality issues , etc. This factory seems to be of excellent reputation but who knows. Shenzhen Grand Technology Co. LTD has been around making guitars for 13 years ( so they say ) but I was a little disappointed that, as i was told, the factory would not resume production until Feb 10. Any advice that I should be concerned about ? Are you familiar with this factory and its reputation ? I am growing concerned after your article. Should I be ? Any help/advice you can offer may or may not ease my situation . Thanks

      1. Anna at 2:37 am

        Do not be concerned. All is well. I have worked with many Chinese companies during these times. Once they resume, everything seems to be normal. Patience is the key. Just like we have Christmas break and all other major holidays, so do they. Just for a little longer. If the company has rave reviews, and they’ve been professional up to this point, I think that all will be well once they return from their break. I am a hair extension retailer, yesterday night I was able to place my order before they shut down. I also ordered banners for a trade show, and it was shipped in time. Now all I have to do is wait. Hope everything goes well!

      2. Fredrik Gronkvist at 7:11 pm

        Hi Edward,

        I wouldn’t worry too much about product samples.

    4. Tim at 2:46 pm

      Thank you for the information you shared and the additional explanations.
      What are the operating dates of China Post? Do they also take off a week before and then 2 weeks after? Or will China Post be only closed for the actual week after New Year?
      My supplier has posted orders for me and I have a tracking number, but it was only posted yesterday the 25th January. What are my chances?

      1. Fredrik Gronkvist at 2:21 pm

        Hi Tim,

        I think China Post operates throughout the CNY, although with reduced capacity. If it’s already posted, it should reach you before CNY.

    5. Isaac Horowitz at 10:23 am

      When do the ports officially close? If I have an order ready at the end of Jan, when is latest I can ship

      1. Fredrik Gronkvist at 4:54 pm

        Hello Isaac,

        I don’t think the ports are entirely closed during CNY. They still operate, but with less staff. If you ship before Jan 25th it should be fine.

    6. Garry Pahwa at 4:10 am

      Thanks for such detailed article. And yeah! Happy new year in advance

    7. alki at 11:02 pm

      Looking great thanks for your info.

      1. Fredrik Gronkvist at 12:52 pm

        Thank you!

    8. FERDINAND ESTANISLAO at 4:11 pm

      this business tip here is one of the best business tip i get this year.
      we are importing soldering tools from China & many of our clients are angry because of our delayed delivery.

      next year i will be ready,
      thank you for the enlightenment


      1. Fredrik Gronkvist at 10:54 am

        Hi Ferdi,

        Been there myself so I know how frustrating it can be! Planning ahead is the only solution.

    9. Casey at 9:13 am

      Hi Fredrik,
      Thank you for the article a very helpful reminder. Because of your article I’m mapping all the Chinese national holidays into my business calendar along with reminders for dates that proceed the cutoffs when inventory orders would need to be placed in order to be shipped before CNY.
      Just wondering if you have similar advice or an article I can read on the other major Chinese holiday “National Day” that leads to a week long holiday in the first week of October each year?

      1. Fredrik Gronkvist at 9:00 am

        Hello Casey,

        Good idea, we will write an article about the national holiday later this year.

        Currently we don’t have any article about that topic

    10. Theodora at 4:22 pm

      I want to buy some hoodies from China online.
      Should I wait until after New Years to order them?
      Will my orders be accepted if I order them during New years?

    11. Paul at 11:04 pm

      Interesting and crucial post. So what do you do if you are a seller dropshiping from Alieexpress via ebay? I feel this could have a negative impact to feedback from my ebay customers.

      Mr Fredrik Grönkvist or someone, please can you advise, as I am first time seller on ebay.


      1. Fredrik Grönkvist at 7:18 am

        Hi Paul,

        This is one of the main issues with drpshipping.. among many other problems. If you dropship from China, there’s no way you can avoid disruption before, during and after the CNY. (and other national holidays)

    12. Boris at 8:20 pm

      Is this relevant for all industries or majority of industries with complex nature of products being manufactured i.e. components, moving parts? Is risk management level less with handmade products or simple products?

      You mentioned that there’s still administrative workers left so samples, prototypes and negotiations can still be conducted as normal. But I am contemplating whether samples should be ordered before CNY since it’s too late for production because you mentioned that one of reasons behind poor quality control might be because some experienced workers do not return that and are replaced by new workers. In this situation can there be scenario where production would not conform to samples ordered before CNY?

      Thank you

      1. Evan Chang at 8:23 am

        Basically, Mr Grönkvist is right in this article. Office workers usually leave one or two days before the CNY Eve while production line workers probably leave one week before that in order to go back to their parents’ home in inland provinces after a long trip from the factories in coastal areas if the orders are not that tight.

        Also, in most government departments, like the Customs, only a few staff are on duty in the one-week national statutory holidays.

        However, I don’t think this time is too late for you to contact your supplier. Give it a try. You know, Chinese is a people known for diligence.

        Good luck!

      2. Fredrik Grönkvist at 3:25 am

        Hi Boris,

        No I would not say it’s less. Perhaps even the opposite, as low value added industries tend to have less internal quality control.

        Indeed, there is always the risk of samples not representing post-CNY produce. However, as long as you are aware of this dynamic, and implement a quality assurance procedure to counter such risks, you are likely to succeed.

        As Mr Chang also says, you can still move forward with suppliers even at this point. Heading down to Shenzhen in a couple of days myself to clear things up before they close the door.

    13. Evan Chang at 10:23 am

      Great reminder, Mr Grönkvist. For many factories in China, the CNY festival will last about 20 days, which begins a week before the Eve and continues until two weeks after that. But for a factory with remarkable regional features like us, most of our stonemasons are local so we usually close the production on the Eve and reopen four days after if we have good orders.

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