China’s 2.5 day weekend summer announcement – Will Your Production be Delayed?

China established the 2-day weekend in 1995, in November 2015 the State Administration and Tourism department proposed and have being mulling over ever since an extended weekend to 2.5 days, with the 40-hour work week maintained.  It has been stated that Hebei, Jiangxi and Chongqing have issued new policy’s in a bid to promote spending over the summer period to State and Privately owned businesses.

While this policy is great for Chinese citizens living in 1 and 2nd Tier cities where there is a level of control over working hours, but what about the factory workers that reside in smaller towns?

Numerous small garment factories with 100 or less employees do not follow government policy which mandates all employees should have 24 continuous hours off in one week, instead giving only one or two days off per month.  These companies follow a basic principle, maximise working hours, reduce social welfare and taxation.

However, if working hours are not maximised, workers will leave and go to the next company that can maximise their working hours and take home wage.  Take home wage greatly depends on the structure of their labour contract, welfare contribution and overtime payment.

The new proposed 2.5-day weekend will only benefit a few and most likely only white collar employees in 1st and 2nd tier cities providing the required 40-hour work week is maintained.  This will see an increased domestic consumption over this period from China’s middle class.  Countries production output will still be maintained by a labour force wanting to maximise their monthly wage.

If you would like to learn more or wish to discuss other supply chain challenges please email us at info@idgc.co

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: