December 27, 2007 -- Coming from the US, a country famous as a place where everyone does their own thing, the power of a central government to control people's lives can be impressive. It's true there is much more freedom in China on a personal level than twenty or even ten years ago. Before the economic reforms, essentially all businesses were state-owned, and were tightly controlled little communities: your health care, your housing, your food, your mail, your permission to marry all came through your working unit. Losing your job then meant losing everything. Those days are gone, but some of their remnants still remain. The one that struck me this week was the ability to control the working calendar.

The working calendar has gone through several reforms over the years. When I was first in China about 12 years ago, a six-day workweek was common, and it was a very big deal when "big weekends" - Saturday off in addition to Sunday - were introduced. (Nowadays, at least in urban areas, two-day weekends are typical.) Later, holiday periods were formalized: three to five days off at Chinese New Year, the May 1 Labor Day, and National Day on October 1. These holidays were meant partly to give workers a break, and partly to stimulate the internal economy by encouraging more consumption. The latest twist is shortening the Labor Day celebration to make time for three traditional holidays, plus adding some individually scheduled vacation. This gives more short breaks during the year, and is also intended to spread out travel – the transportation system gets horribly overloaded during the "Golden Weeks".

All well and good: the objectives are reasonable, the strength of the economy permits more leisure time, and restoring the traditional holidays recognizes China's cultural history. The part that astonishes me is the arbitrariness of the switch-over: I first saw rumblings in the newspapers about a change in the holiday calendar perhaps four months ago; the change was first announced in early December for effect in 2008; then, apparently after some complaints about the planned days off for the western calendar New Year, the plan got modified and republished this week.

So with just two weeks notice, the days off scheduled for January 1 were abruptly changed. And the Labor Day holiday was cut down to a single day with less than six months notice, upsetting quite a few wedding plans since travel by out-of-town guests was no longer practical. But this is the official calendar, and there is really no option but to conform to it.

The other odd twist, for me, is the way mid-week holidays get handled. Around 1968, the US decided to shift some holidays to Mondays even if they actually fell on other dates so that people could have a long weekend. A few holidays with special date significance were left unchanged – "July 4" on any other day doesn't make much sense. The Chinese method is different: leave the holiday where it is and move the weekend! Thus the western New Year change I referred to above: the original plan was to have Jan 1, 2 & 3 as holidays. Since only 1 day off work was allocated, people were expected to work on Saturday Dec 29 and Sunday Dec 30, plus Monday Dec 31 – eight days of work in a row! This can't have been very popular, because less than a week later it was modified to working on Saturday Dec 29, having off December 30 to Jan 1. While this is a better plan, I find it remarkable that the work schedule for the whole country can be tweaked centrally at the last moment. The US Congress has spent much longer deliberating things of less impact!

Useful to remember here is my favorite Will Rogers quip: "I am not a member of any organized party—I am a Democrat." Since Will's time, the level of party discipline among both Democrats and Republicans in the US has declined even further, as the current primary season shows. Whatever else one may say or believe about the Chinese Communist Party, its public face is tightly disciplined. In China, leadership struggles, cases of official corruption, other ills may happen behind the screen – but don't look for more than token dissent at the Party Congress, and (provided they are no threat to local interests) don't expect policy pronouncements to be ignored. On an issue like the work calendar, what Beijing decrees is going to be followed. So the moral of this story is: rules in China are mutable, and can change quickly when the government decides it is appropriate – be prepared to cope with occasional upsets in your operating environment.

My advice on dealing with this issue: your best bet is just complying with the announced policy. These are the officially declared national holidays, even if announced pretty late, and requiring people to work on those days would mean extra compensation as much as three times the normal rate, in accordance with labor regulations. The last minute changes may have upset a few plans but I haven't heard any serious complaining where I work, perhaps because it is only a one day holiday, so most no major trips were planned, and since everyone else gets the same days off, any activities just shift to new dates.

In a more general sense, companies should beware of making business plans which are critically dependent on, in other words, profitable only under, specific policies or laws. The government giveth, and the government taketh away – in China, and everywhere else! – so be prudent: assess the business' vulnerability to regulatory changes, and either avoid the risks or adjust your margins to compensate for them.


Since graduating from Yale in 1974, Dwight Spreng has acquired over 30 years of experience in the electronics industry. He is currently doing sourcing for an American manufacturer of test instruments. He now lives in Shanghai, but has also spent prolonged periods of time in Pakistan, Indonesia, Japan and Germany. He welcomes your comments and suggestions via email: dwight.spreng@tromblyltd.com.