China’s Chinese New Year exodus threatens more factory disruption

BEIJING – When Mr Liu Junde was told by his boss he couldn’t take 20 days of leave from his factory job in Yiwu city in China, he promptly quit.

Like hundreds of millions of workers across China, it’s the first time in three years that Mr Liu, 48, will be able to travel to his hometown during the upcoming Chinese New Year holidays. Having endured three years of Covid-19 travel restrictions, which had made the journey home complicated and costly, he says he has no regrets leaving his job at a solar panel parts factory, where he was a warehouse worker.

“I feel great now because I’m going home,” Mr Liu said outside the crowded train station in Yiwu, where he stood smiling next to his large woven plastic bag and grey suitcase. He will spend 28 hours changing between trains and buses to reach his hometown in rural Gansu province.

“I just really want to spend some good time with my family,” said Mr Liu. “I will start to look for jobs when the holiday is over.” 

With China’s 296 million migrant workers on the move this year, factories and local governments are bracing for disruptions during a longer-than-usual holiday period. China has seven days of public holidays for the Chinese New Year – which runs this year from Jan 21 – 27 – but many workers don’t plan to return until after Feb 5, the day of the traditional Lantern Festival. 

In the manufacturing powerhouse province of Zhejiang – where Yiwu city is based – factories have stopped production one to two weeks earlier than normal this year.

With Covid-19 infections starting to surge in December and travel restrictions suddenly dropped, many workers began journeying home from late last month already, according to interviews with over two dozen employers and workers last week.

Businesses and local governments are now kicking into gear to minimise the disruptions. They are doling out cash, arranging recruiting trips for employers and organising job fairs to make sure workers return in early February.

Yiwu is a hub for the global trade of small consumer goods – everything from jewellery to home furnishings, toys and electronic equipment. Before the pandemic, the city would be bustling with thousands of buyers from across the world flocking to its massive wholesale trade market. 

During a visit to the market last week, most shops were closed and staff at the few ones still open were busy sorting their inventories and making last-minute sales to workers returning home. 

Official data already shows some damage to the labour market as workers leave their jobs. The labour participation rate declined by 1.1 percentage point in December, according to data released by the National Bureau of Statistics this week. 

Labour shortages were a major problem for many factories in 2020, when China locked down most of the country starting from the Chinese New Year break and then reopened in the following months. Urban employment and average hours took about three months to recover, according to a study published by the Reserve Bank of Australia. 

And even when the labour market recovered in June 2020, a small proportion of migrant workers didn’t return to their jobs once they’d left. 


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