Chunyun (literally “Spring transport”) refers to the 40-day peak travel period around Spring Festival (aka Lunar New Year), which this year falls on 29 January. Millions of people take advantage of the extended time off from work and study to travel back to their home regions and spend the important festival with family. As a result, train stations and airports are packed, and tickets are expensive and hard to come by.

How big will chunyun 2025 be?

This year, authorities are estimating a record 9 billion domestic trips (of which car trips will account for 80%) will be made during the 40-day period of festivities, which began on 14 January 2025. It is hoped that travel and tourism during this period will boost domestic consumption at a time when the Chinese economy has been struggling.

New Spring Festival travel trends

As China Briefing notes, in recent years, there has been a growing trend of people combining their Spring Festival celebrations with tourism and celebrating with their families in a new destination. This is especially true among urban Millennials and Gen Z, many of whom find the pressure of returning home and spending time with more traditionally-minded relatives overwhelming.

Within China, the most popular destinations for Spring Festival travel are either warmer locations such as Yunnan and Guangdong, or winter destinations like Harbin and Jilin. Officials at the Ministry of Transport have predicted a 25% increase in travel for leisure purposes.

International travel is also popular with people from first and second-tier cities. With several new visa exemptions for Chinese tourists in place (including Thailand and Singapore), international journeys are set to boom. It is also hoped that China’s own new beneficial visa policies will attract foreign visitors to China. According to Xinhua, in 2024, 64.88 million foreign visitors travelled to China, an 82.9% increase from the previous year, of which visa-free entries accounted for 20.12 million visits.

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Spring Festival 2025 will run from 28 January to 4 February, spanning a total of eight days. 26 January (Sunday) and 8 February (Saturday) are designated as work days to compensate for the long Spring Festival break. In a departure from previous years, the holiday has been extended by an additional day, beginning on Chinese New Year’s Eve (除夕).

Overtime payment for hours working during Spring Festival

To ensure the smooth operation of production and sales activities during Spring Festival, many companies need to adjust employee leave schedules and establish duty rosters. When requiring employees to work during the holiday, compliance with overtime payment regulations is critical.

Under Chinese labour laws and regulations, overtime payment rates vary depending on the type of rest days and the working hour system implemented.

Under the standard working hour system, for work performed on an official public holiday (i.e. 28-31 January in the case of Spring Festival), not less than 300% of the normal wage shall be paid; for work on weekend or an adjusted rest day (1-4 February), and where such rest days cannot be postponed and taken at another time, not less than 200% of the normal wage shall be paid.

Under the comprehensive working hour system, for work performed on public holidays (28-31 January), not less than 300% of the normal wage shall be paid. However, no rest day is outlined under this system, so for work performed on those adjusted working days and weekends, no overtime payments are available.

Under the non-fixed work hour system, there are differences in overtime regulations across different regions. For instance, in Beijing, employees under the non-fixed work hour system are not entitled to overtime pay for hours worked on public holidays (28-31 January). However, in Shanghai, these hours are considered overtime, and employers are required to pay compensation of up to 300% of the normal wage.

For adjusted working days on weekends, no overtime payment is due.

Annual bonus and tax implications

In China, many companies will provide employees with a one-time end-of-year bonus before or around Spring Festival. One of the most common ways that companies calculate the bonus amount is the “13th-month bonus” wherein the company pays an additional month’s salary around the CNY holiday. However, companies can implement their own bonus system as they see fit.

Annual bonuses in China are subject to individual income tax (IIT). Currently, IIT on bonuses can be calculated in one of two ways:

• Method 1: Calculated and paid separately on the annual one-time bonus.
• Method 2: Calculated and paid on the annual one-time bonus combined with the employee’s total annual income.

The first method is considered preferential treatment as it may decrease the tax burden for some taxpayers. This method will be applicable until the end of 2027. However, in general, for employees with low basic salaries, it may be more beneficial to combine their annual bonuses with their basic salary to calculate the total IIT (under Method 2) because various deductions could be employed to reduce the tax burden. Meanwhile, for employees with comparatively high basic salaries, Method 1 can potentially reduce the tax burden.

Employee retention during Chinese New Year

Spring Festival is a peak period for employee turnover, as many people consider changing jobs or career paths. This trend is partly driven by employees’ desire to stay in their current positions long enough to receive their annual bonuses. However, the cultural significance of the holiday also plays a role, as Spring Festival symbolises new beginnings, prompting individuals to seek fresh starts. Additionally, higher resignation rates during this time create more opportunities for job seekers. Consequently, the period following the Spring Festival can be particularly stressful for HR teams, who must manage a surge in vacancies.

In 2025, employee retention may become even more challenging. With both employers and employees facing economic difficulties, companies may lean toward offering smaller annual bonuses and more modest salary increases. According to a leading human resources agency, average salary adjustments for 2025 are expected to stand at 4.4%. However, for employees dealing with financial pressures, such as mortgages, childcare, and retirement savings, these increases may not be sufficient. As a result, many professionals may be more inclined to explore new opportunities. The voluntary turnover rate in the first half of 2024 stood at 3.9%, lower than that of the same period of the previous year, which stood at 4.9%.

In situations where financial incentives are limited, companies can implement various long-term strategies to enhance employee satisfaction and loyalty. Key retention strategies include:

• Fostering a positive work environment: Cultivating a supportive and engaging workplace culture helps improve employee morale and loyalty during challenging times.
• Promoting work-life balance: Encouraging a healthy work-life balance can alleviate stress, particularly during periods of economic strain. Companies should carefully manage workloads and set realistic performance expectations to prevent burnout.
• Career development and job stability: Offering employees opportunities for career growth and ensuring job stability are critical to retaining talent. Training and upskilling initiatives not only demonstrate a commitment to employees’ development but also enhance overall productivity.
• Flexible work arrangements: Providing flexible or hybrid work options can significantly reduce stress, especially for employees who benefit from a change in their work environment. Whether through remote work, flexible hours, or compressed work schedules, accommodating individual preferences enhances job satisfaction and reduces stress from rigid work structures.

For example, Ctrip Group has introduced a flexible home-office policy for its customer service staff, allowing eligible employees to work remotely during the Chinese New Year period from January 1 to February 28, 2025. This policy gives employees the option to choose their remote work periods, with up to two months of flexibility. The initiative aims to break the geographical constraints of traditional office settings and helps frontline workers better balance family and work commitments during the holiday season.

Financial and logistical preparations

In addition, proper financial and logistical planning is crucial to ensuring smooth operations and minimizing disruptions during the Spring Festival period.

Sales forecasting and inventory management: Accurate sales forecasts based on historical data and current market trends are essential for predicting demand during Spring Festival and the period immediately following. Businesses should plan and prepare inventory accordingly, taking into account potential production shutdowns and logistic delays due to the holiday. This will help prevent stockouts and ensure that customers’ needs are met even if factories close or shipping services are limited.

Cash flow management: Maintaining adequate liquidity is also critical during the holiday season. Companies should ensure they have sufficient working capital to cover operational expenses, including emergency costs that may arise during the holiday. A review of cash flow projections can help identify potential cash shortages, enabling businesses to secure necessary funds before the break.

Inventory procurement and material reserves: Ahead of the holiday season, businesses should stockpile essential materials and supplies based on expected demand. This includes raw materials, office supplies, and seasonal items such as decorations and promotional goods. Ensuring that necessary resources are in place before the holiday will help businesses operate smoothly, even if supply chains are disrupted.

By taking these key steps in financial and logistical planning, businesses can ensure they are well-prepared for both the operational challenges of Spring Festival and the financial demands of the holiday season. Proper forecasting, inventory management, and preparation for employee needs will contribute to a seamless holiday experience and strong performance in the months following.

This article was first published by Dezan Shira & Associates’ China Briefing

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During the eight-day-long holiday, also known as Spring Festival, tourism revenues surged to – and even surpassed – pre-pandemic levels, providing a welcome boost to China’s beleaguered economy.

According to data from the Ministry of Culture and Tourism, overall domestic tourism spending increased 7.7% compared to 2019 (and 47.3% compared to 2023, when zero Covid restrictions had only just been relaxed), although Reuters estimated that the average spend per trip decreased by around RMB 100 compared to 2019, suggesting that Chinese tourists are keeping a tighter grip on their spending.

International travel also rebounded to 90% of 2019 levels, with Singapore and Malaysia proving particularly popular having recently allowed visa-free travel for most Chinese citizens.

Amid overall rising tourism numbers, media highlighted a number of specific holiday-related trends.

Reuters reported that Chinese tourists are increasingly abandoning group tours and shopping-focused holidays in favour of independently-planned, active, adventurous, and experience-based trips. Nevertheless, for domestic tourists, shopping was still high on the agenda, with Hainan reporting a record RMB 2.49 billion (£274.6 million) of duty-free spending during the holiday. That amounts to an average spend of over RMB 8,000 (£882) per person.

The phenomenon of “Home First, Travel Next” began to emerge during the holiday, in which people take a quick trip home to celebrate the new year with family, followed by travel to tourism destinations. Although the holiday is traditionally a time to spend with family, some young people prefer to skip it to avoid facing interrogation by relatives about topics like money, marriage, and children.

Those that have eschewed children for dependents of a furrier variety led to a massive demand for pet-sitting services, causing a massive increase in prices. According to some estimates, the number of pets in China increased 2.7% year on year in 2023 to almost 200 million.

Finally, ahead of the holiday, many Chinese youth increasingly bought spiritual ornaments such as prayer beads and traditional hanfu clothing (a term for traditional or traditionally inspired Chinese clothing). This reflects a growing interest in traditional Chinese culture and displays of Chinese nationalism at a time when Xi Jinping has emphasised the need for China to assert “cultural confidence”.

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Chunyun (literally “Spring transport”) refers to the 40-day peak travel period around Spring Festival (aka Lunar New Year), which this year falls on 10 February. Millions of people take advantage of the extended time off from work and study to travel back to their home regions and spend the important festival with family. As a result, train stations and airports are packed, and tickets are expensive and hard to come by.

How big will chunyun 2024 be?

One year on from the lifting of China’s Covid restrictions, this year’s chunyun is expected to return to pre-pandemic levels, with Ministry of Transport officials predicting more than 9 billion passenger trips. Between 26 January and 1 February alone – the first week of the peak travel period – the country’s railway network handled 81.55 million journeys, or over 11 million a day.

Many hope that the Spring Festival period will inject some much-needed vitality into the economy after the catering and travel industries contributed significantly to China’s GDP in 2023. Nevertheless, pent-up demand is waning, and some consumers will be spooked by risks such as the continued troubles in the property sector.

New Spring Festival travel trends

As China Briefing notes, in recent years, there has been a growing trend of people combining their Spring Festival celebrations with tourism and celebrating with their family in a new destination. This is especially true among urban Millennials and Gen Z, many of whom find the pressure of returning home and spending time with more traditionally-minded relatives overwhelming.

Within China, the most popular destinations for Spring Festival travel are either warmer locations such as Yunnan and Guangdong, or winter destinations like Harbin and Beijing.

International travel is also popular with people from first and second-tier cities. Now that China’s Covid restrictions are practically a distant memory, and with several new mutual visa exemptions (including Thailand and Singapore) in place, international journeys are set to boom. The National Immigration Administration has predicted that the daily average number of international border clearances will reach 1.8 million people – more than three times higher than 2023 and almost equalling 2019’s figures.

The post What is ‘chunyun’ and how important is it to the Chinese economy? appeared first on Focus - China Britain Business Council.

Lunar New Year, also known as the Spring Festival, is the most anticipated and celebrated Chinese holiday, this year arriving on 1 February and ushering in the Year of the Tiger. But for many businesses, it can be a disruptive time that requires advance planning and strategy. It is important to be aware that the effects of LNY will be felt long before 31 January, as firms start to wind down their business a week or so prior to the first day of the festival.

Here we list four key considerations for business in China during the LNY period.

Prepare inventory stock

In order to ensure that business operations are not adversely affected, inventory managers should obtain a detailed schedule of opening and closing dates well in advance of the LNY and order enough stock to see their business through the holiday period. Foreign companies should also bear in mind that the LNY public holiday is one of the year’s biggest shopping festivals, comparable to the Christmas season in many overseas markets.

Riccardo Benussi, Head of European Business Development at Dezan Shira & Associates’ Munich-Milan Office, comments that, “In the days and weeks leading up to the New Year, Chinese shoppers will rush to online and offline points of sale to purchase gifts for loved ones as well as delicious foods and drinks to greet guests at their homes.”

In many consumer goods industries, businesses achieve their highest sales figures around LNY. “Foreign companies should prepare for a surge in demand at this time of the year, and appropriately stock up their China warehouses to ensure the rise in consumption is met in a timely and orderly fashion,” Benussi explains.

Quality control

Meanwhile, as pre-festival production is increased to fill the ‘new year gap,’ and pressure on suppliers rises, the quality of products can often suffer.

Issues in product quality control can sometimes spill over after the holiday period as high employee turnover requires new workers to be found and trained to replace those that didn’t return – meaning that delays are also possible. To avoid this, it is advisable to increase monitoring and communication in the months leading up to, and after, the holidays in order to minimise any potential lapses.

Similar bottlenecks can occur in the shipping or logistics industries, so it is important to ensure that shipments are booked and at port well in advance of the shipment date. Most Chinese port areas will be closed completely or will be operating at a limited capacity, so they are best avoided as much as possible at this time. During this period of the year, most fields of Chinese logistics are faced with a staff shortage as people return home, and thus transporting goods can also become significantly more expensive.

Settle payments beforehand

To add to these difficulties, during the long holiday period, limited payments can be processed to and from China or Hong Kong depending on banks and local policies. Often the most suitable course of action is to settle all payments before LNY to avoid any potential problems with late payment fees. Communicating with suppliers and planning ahead will go a long way toward ensuring that effects on cash flow are minimised as much as possible.

Red packet etiquette

Red packets (‘hongbao’ in Mandarin and ‘lai see’ in Cantonese) are commonly given during the LNY Period. The significance of these red packets relates to the red envelopes themselves, which are seen to symbolise happiness, and good luck. Therefore, when a red envelope is given, this is seen as sending good wishes, happiness, and luck to the receiver.

Traditionally, if you have started earning an income, you should be giving red packets to close family members that are unmarried and younger than you or retirees. However, this is a general rule only, and there is no hard-and-fast rule on who to give a red packet to as well as how much to give.

In Chinese companies, however, red envelopes are often given as a form of a 13th-month salary — through issuing double pay in January, issuing a bonus over the Lunar New Year or via WeChat red envelopes. This is typically given on the last day of the working day before the Lunar New Year holiday.

Any company doing business in China should be prepared to adopt local practices over this festive period.

Prepare for the holiday season

Lunar New Year is a significant time of the year for not only individuals and families, but also businesses in China, as it is often a time to re-group, re-strategise, and re-staff for the upcoming year. Planning in advance for this festival can help set your company apart from the rest, reducing significant problems in supply chain and logistics, while also maximising opportunities that the festival can bring to your business.

A version of this article was first published by China Briefing, which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world. 

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As one of the most celebrated events in China and a festival often associated with gifting and reunions with family and friends, Chinese New Year (aka Spring Festival) presents a significant commercial opportunity for brands. However, since the festival holds enormous cultural importance in China, it is also key that any marketing attempts are relevant and sensitive to the country and culture.

During CNY, many brands will hold promotions, offer discounts, design special packaging, or release limited edition products or gift sets, with the imagery used often associated with the Chinese zodiac animal of the incoming year. These campaigns and releases sometimes occur weeks in advance of Chinese New Year, which is also when consumers begin to shop for the festival.

Campaign highlights from CNY 2021

Doraemon x Gucci

• With collaborations becoming more popular in the past couple of years, Gucci partnered with iconic Japanese cartoon character Doraemon to create a capsule collection. As the collection was inspired by the Chinese zodiac animal of 2021 – the ox – the blue robot cat’s appearance was redesigned for some of the items in the collection to include bovine horns. The campaign also included an augmented reality component as customers could scan the Gucci packaging or art walls located in Shanghai and Hong Kong through the Gucci app and watch Doraemon perform a dance. 
• Marketing for this CNY campaign was widespread across multiple touch points, including WeChat, Douyin, Xiaohongshu and Weibo, and even included an offline pop-up location. 
• Through this collaboration, Gucci was able to tap into the nostalgia that many Chinese consumers have for Doraemon, while the association with Gucci added a sense of prestige and novelty to the character.

A screenshot from Coca-Cola’s 2021 CNY advert, telling stories of different family experiences during the pandemic

Coca-Cola’s CNY confessions
Coca-Cola released an ad focused on telling the stories of three young individuals living in China during the Covid-19 pandemic, conveying how the situation “inspired a shift in perspective of what truly matters – family, friends, connection and love,” according to Bassam Qureshi, head of IMX at Coca Cola.

• • The ad was able to engage with viewer emotions, while at the same time encouraging viewers to share their own stories and thus create user-generated content (UGC).

Nike Air Jordan 1 Low “CNY” special release

• Nike designed and launched a special edition of their Nike Air Jordan 1 Low inspired by Chinese New Year and the Year of the Ox. The sneakers used a bold combination of black and red, with Ox imagery in classic Chinese art style, metallic gold thread, and gold tassels tied with red thread. By tastefully including Chinese cultural characteristics, Nike was able to release special edition footwear that is high quality, aesthetically well designed, and shows appreciation for China and Chinese New Year.

Johnnie Walker release limited-edition bottles to celebrate the Year of the Ox

Johnnie Walker’s limited-edition Year of the Ox scotch

• For Chinese New Year 2021, Johnnie Walker collaborated with Chinese artist Shirley Gong to create a limited-edition version of its Blue Label bottle. The art on the bottle showcased an Ox standing over mountain clouds, representing prosperity and good fortune, and combining a Chinese artistic style with the Scottish alcohol brand.

How to develop your own successful CNY campaign

• Cultural relevance and respect are more important than ever, especially when it comes to a festival that is so deeply aligned with Chinese traditions. Brands need to show that they appreciate Chinese culture and aesthetics by using appropriate colours, symbols, art styles and imagery, while also conveying a festive tone. Brands could work with a local Chinese creative team or artist to come up with culturally relevant and aesthetically pleasing designs that will resonate with Chinese consumers.
• Although many Chinese New Year advertising campaigns include moving campaigns or videos that engage the viewers’ emotions, it is important to note that CNY campaigns should generally not be overly serious or sad. The festival is a time of celebration, humour, family and reunion, and any emotions brought up through the campaigns should relate to these elements and can demonstrate that the brand is attentive to and understands its Chinese consumers.

• Brands sometimes choose to use humour and puns in their CNY campaigns. When done appropriately, such as ensuring that any jokes used are not culturally insensitive, these types of campaigns can gain huge interest from consumers, especially among younger ones. 
• With the increase in the popularity of video, releasing engaging video content that emphasises the values and traditions of the festival could elevate the brand campaign further, especially if shared on social media.
• Encourage user-generated content through your CNY campaigns to increase word-of-mouth marketing, which is extremely powerful when it comes to brand awareness. Examples include creating challenges on Douyin to encourage participation from users, or encouraging responses to questions or prompts, and providing prizes for the best responses. 
• Use a variety of media platforms to promote your campaign, ensuring that touch points exist across any channels that are relevant to your brand, such as WeChat, Xiaohongshu, Douyin, Weibo, Kuaishou, Bilibili, etc.  

As competition among both foreign and domestic brands continues to increase, brands will need to develop unique campaigns for CNY that can differentiate themselves from the crowd and ideally engage consumers’ emotions and encourage healthy interaction. For foreign brands, the creation of a culturally relevant campaign that does not overstep but is still able to resonate with Chinese consumers will be a careful balancing act that could bring massive positive attention. 

A version of this article first appeared in China market-focused magazine, The RED Edition – Special Issue 2021, published by RedFern Digital

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