DiligenceChina

There’s a cold steady rain in Shanghai and no one seems to be answering the phone. That can only mean one thing – we’re entering another vaguely defined holiday season in China.

Infoplease.com has this to say about the holiday:

May 1st, often called May Day, just might have more holidays than any other day of the year. It’s a celebration of Spring. It’s a day of political protests. It’s a neopagan festival, a saint’s feast day, and a day for organized labor. In many countries, it is a national holiday.

Here in the People’s Republic, it’s Labor Day – an oxymoron if ever there was one. Officially, it’s listed as a 3 day public holiday. The problem is that 3 day holidays in China have a way of morphing into 5 day, or 7 day, or 21 day vacations. And the government – with an admirable mix of optimism and mercantilist logic – likes to muddy the scheduling waters even further by mandating that some businesses justify longer holidays by keeping their door open over the preceding and/or following weekend. (A policy that tends to keep the trains full and the holiday spending brisk.)

China has 3 big holidays a year that require some kind of business rescheduling or adjustment. I recently visited the US and found myself in the middle of Easter and Passover seasons. Individuals altered personal and work schedules to accommodate their plans, but the entire country didn’t shut down for a week. What’s more, it was clearly stated which days businesses would be closed – and when they would open again. In China, the situation is still very vague and flexible. As of late last week, many small businesses still didn’t have a clear timetable for their own staff and workers – let alone their clients!

China has made tremendous strides in rationalizing its business situation in the past few years. But now we have reached a point where we are butting up against some bedrock culture-related business issues that will be harder to adjust. The obvious one is corruption. A friend of mine just returned from a trip to Mexico and expressed concern that China could easily end up with a similar “dual system” of stated rules and actual practice – at least as the situation applied to SMEs. But cleaning up corruption, while challenging, is universally considered an admirable goal. (The beneficiaries of red-envelopes tend to be the loudest proponents of measures that will make other people tow the party line.) But China’s liberal attitude towards official holidays and business closures is a less visible but equally important policy in need of reform. Cutting back on vacation days, however, is not NEARLY as popular as eradicating corruption– except among business owners.

This week I will be watching carefully to see just how many small and medium sized businesses are keeping their doors open. I consider this an important indicator of China’s economic reform – though one that doesn’t make me particularly popular with the workforces of my business-owning friends and clients.