North Central China Real Estate Association
Jiefang East Road 161
Changzhi, Shanxi 046000

Membership@NCCREA.com

  • Home
  • About Us
  • Mission Statement
  • Membership
  • Events
  • Articles
  • News Center
  • Contact Us
  • Freedom of Speech in China? Business beware 3.16.13
  • China's Energy Security 2.25.13
  • Currency manipulation: what to do? 1.18.13
  • The new face of Chinese industrial policy: antidumping in the petrochemical and steel industries 12.4.12
  • Shopping Centers & Coffee Houses: Painful Lessons of Chinese Consumer Behavior 9.20.12
  • China's Real Estate Pyramid 5.28.12
  • The Convergence of Divergence 5.15.12
  • China's Shell Game 4.25.12
  • Catch-22: The Future of China 3.31.12
  • Interpret This! 3.21.12
  • 30% Off - The Post Lantern Lull 2.19.12
  • Finding the Heat 1.23.12
  • Going All The Way 1.18.12
  • Johnny Law 1.9.12
  • 5% Rule 11.18.11
  • Context not Contents 11.2.11
  • Common Law not so Common 9.15.11
  • Renting your Purchase 9.4.11
  • Revolution Evolution 8.30.11
  • Starting in China 8.24.11
  • If You Build It They Will Come 8.18.11
  • I'm an Expert on War and Peace 8.17.11
  • Be Like Mike 8.13.11
  • Friends with Benefits 8.7.11
  • Business in Wonderland: Requirements for a China WFOE 7.29.11
  • China Real Estate: There is no Bubble 7.4.11
  • Foreign Real Estate Development in China 6.3.11

30% Off - The Post Lantern Lull

30% OFF - THE POST LANTERN LULL

Jeff LoCastro, February 19, 2012

Founder & President, NCCREA

 

In China, the long holiday season has finally ended.  The Spring Festival 

(Chinese New Year) and Lantern Festival (which marks the end of the 

Spring holiday) has once again come to a tumultuous close officially 

ending February 7 of this year.  These 

two holidays coming back to back 

encompass approximately 5 1/2 weeks 

every year in steady time-off

vacation.  Now this does not include 

every working person in China . . . 

just most.  If you are a builder, developer or factory owner it does 

however affect 100% of your labor.  But it's the 30% that creates most of 

the havoc.  

 

If you are a factory owner and want to keep the machines humming, be 

prepared to pay double and, in some cases, triple-time to keep product 

moving. This typically comes as a complete shock to most first-time 

operators and a jolt to over-seas producers with manufacturing contracts

with Chinese factories.  Your factory rep likely didn't tell you that during

the long holiday your labor costs were going to double or triple . . . or 

your supply channel would be cut-off. Surprise. 

 

If you are builder or developer, be prepared to have your project come 

to a complete and sudden halt for 5 - 5 1/2 weeks.  During the planning 

stages, your general contractor likely didn't tell you this little nugget.  

Surprise.  It is exceedingly frustrating to operate in dry (albeit cold) 

weather during the Holiday without ever a spade being turned.

However, if you know this going in (which most don't) you can at least 

plan for it.  The larger issue is the 30% off.

 

Despite China's large population, there is a labor shortage of sorts.  More

to the point, there is a mal-distribution of labor. The builder or 

developer will find that virtually 100% of his labor force is itinerant 

workers. To get your job done, 

your crews will have come from 

somewhere else to specifically 

work on your project.   During the

long holiday these workers, like

most in China, head home. The

issue is, when work resumes the day after Lantern Festival, only about 

70% of your crews will return. 30% are off and gone. 

 







This is a well-known annual episode that plays out all over China and 

understood as simply the way things are.  It is also a well kept secret.

Much like everything else in the Middle Kingdom, one will not find any 

formulas, metrics, or published statistics on the 30% off.  This 

approximation comes from, again as much as everything else here does, 

from empirical evidence, i.e., Experience.   I have coined the phrase 

"Post Lantern Lull" or PLL to describe this not so rare phenomenon.

 

What happened to the 30%? Why do they not return?

 

First one must understand that the treks for these migrant workers are 

long and hard.  They travel 3rd class and carry their belongings with them

every step of the way.  It is  a hard, difficult adventure sometimes

covering thousands of very uncomfortable miles. They don't return for 

two main reasons:  1) Most do not return because they may have found 

work closer to home, 2) They have saved enough money to start their 

own little business or do something that keeps them in their

hometown.  Small news-stands and drink kiosks are very popular dreams 

or these workers.

 

What do you do about the PLL?  

 

1)  Nothing.  Just know it is going to happen, plan for it, and understand 

that you may be about 30% less efficient for some time immediately after 

the holiday and must go on another hiring spree to get back up to speed.

2) Don't waste your time and your money on bonuses to return to work.  

Money, food, or any other perk is not going to get them to return.  If 

they have already saved enough money which allows them to stay in 

their home town, they will not travel.  If they have found work closer to

home, you've lost them.  There is nothing you can do.

 

The biggest demand on the builder or developer regarding the 30% off is 

when you don't know it is going to happen. It can be catastrophic.  That 

doesn't make the challenge and the frustration any less severe when

you know it is coming, but it does make it workable and allows the 

builder or developer the opportunity to plan and establish processes to 

handle the inevitable.

 

COPYRIGHT 2012 JEFF LOCASTRO
DISTRIBUTED BY NCCREA
CHANGZHI, SHANXI, PRC

Contact the author at:  Jeff@NCCREA.com or  Jeff@CaliforniaSecured.com



Copyright 2011 North Central China Real Estate Association. All rights reserved. All content, web site design, text, graphics, the selection and arrangement thereof are Copyright 2010-2011 by North Central China Real Estate Association.   Any use of this website, including reproduction, modification, distribution or republication in any form, without the prior written consent of North Central China Real Estate Association is strictly prohibited.

 

North Central China Real Estate Association
Jiefang East Road 161
Changzhi, Shanxi 046000

Membership@NCCREA.com