The Lunar New Year is foreign tech companies’ longest hangover

By Masha Borak  

It’s that time of the year again! No, I don’t mean “no-drink” January. It’s Chinese New Year! Also known as the Spring Festival, or the Lunar New Year is just round the corner – the time when every single production facility in China shuts down, and the supply chain suddenly breaks. The only thing you get from your Chinese partners is dead silence. Off they go, drinking and dining with their families and friends while watching the loud CCTV broadcast of the Spring Festival Gala for as long as 10 days.

The impact of holiday shutdowns is felt all around the globe. Retailers and importers have to plan months in advance to ensure a smooth supply and avoid quality issues that come during the rush to fulfill orders.

Spring festival
Photo from Baidu Images.

The impact in China is extreme. China’s entire transportation system suffers an enormous strain while workers rush back to their hometowns to spend Lunar New Year with their families or fly out on vacations or shopping sprees.

Economists often pay less attention to numbers during this period while making predictions about China’s economic trajectory. Most of us are probably aware of the headaches experienced by importers around the world during the Spring Festival, but what does the “world’s largest migration” mean for foreign tech companies in China?

“Basically, we have to offer them enough money to continue working during this period,” said Abdel Beldy who works at a mobile gaming company based in Beijing. Although having the office to himself seems fun, the company does feel the lack of employees. That is why they prepare by automating some tasks.

Other companies have to make more meticulous preparations for the holiday period.

“Customers that are used to dealing with China create pressure by making larger orders before the New Year so they could be covered for the few weeks when they know they can’t count on us,” said Sinisa Bosanac working at a Suzhou-based plastics technology company.

“Component suppliers and installers don’t want to get involved in any bigger projects several weeks before the New Year because they cannot make sure that everything will be ready before then. This is important because they prefer to get paid before the holidays in order to pay out bonuses for their workers”.

Companies in China usually hand out red envelopes with bonuses to employees before the New Year. Because of the extra expenditures and long break, some smaller firms have issues with cash flow after the holidays, Bosanac explained.

As many Chinese companies consider New Year to be a fresh start and workers sometimes use this occasion to switch to another job, it can be hard to keep track of previous arrangements.

“People tend to forget everything that was arranged before the New Year so we have to plan things all over again,” said Bosanac.

No matter which industry you belong to, preparing for the Chinese New Year on time can save you a lot of inconvenience. This year starting from the end of January till the first week of February, we will be welcoming the year of the Rooster. Well, one astrologer said that it will be a great year for “businesses related to fire and communications”.

Be sure to communicate your needs to your partners on time, and definitely try to avoid business travel during the festive season. And lastly, don’t forget to wish your coworkers “Gong Xi Fa Cai”!

(Top photo from

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