Chinese New Year

Fifteen days of celebrations and firecrackers fill the streets of China, and families are reunited after a year apart. Delicious dumplings fill plates in many homes, and eager children joyously take red envelopes of money from their parents. This wonderful time is Chinese New Year (CNY), a celebration of the new lunar year and a wish for good luck in the coming year, and 2020 is the year of the Rat.

While Chinese New Year follows the Lunar calendar and is formally known as the Lunar New Year, the most notable Lunar New Year celebrations are of the CNY variety. Otherwise known as the Spring Festival for its position at the beginning of spring, CNY is the most-celebrated holiday in East Asia and has a diversity of customs and traditions. While these tend to vary greatly between regions, there are several common traditions found throughout the country. Furthermore, the outstanding size of China’s population ensures that a holiday of this magnitude (15 days! Not just 1!) severely impacts the national and global economy. With CNY ending today, it is fitting to reflect on this culturally-rich holiday.

Chinese New Year’s Traditions

China is home to a variety of different people, all with different customs. However, shared traditions are easy to pinpoint, among which are red envelopes, fireworks/lanterns, feasting with family, and cleanliness. While cleaning may not sound like fun, it is an integral part of any Chinese New Year celebration. In anticipation of New Year’s Eve and Day, families all over the country will thoroughly clean and freshen up the house, to sweep away the dirt and bad luck of the past year. This spring cleaning will be the only cleaning done until after the New Year’s though, as sweeping during the holiday is akin to “sweeping away the good luck” and is a taboo for most. Just as you can sweep away the good luck, you can bring in the bad luck. Doing forbidden acts during this time will result in a whole year of bad luck; bad behavior, swearing, hurting others, or having otherwise inauspicious events--death, accidents, etc--will soil the whole year. In accordance with this concept of cleanliness, many (myself included) purchase new clothes for the occasion, often choosing the auspicious color of red.

Red appears everywhere, from clothing to lanterns to fireworks, and even red envelopes. A time of celebration and generosity, CNY is a holiday for gifting friends and family with money placed in red envelopes. The only downside is that the old are expected to give the young, including even slightly younger family members, money. Sometimes coworkers, employees, and the elderly are gifted money as well. Further popularized by digital apps such as WeChat, red envelopes have become one of the most-liked traditions each year.

While America’s New Year celebrations are a sight to be had--NYC alone releases 40,000 fireworks alone--they certainly pale next to CNY celebrations. In order to scare off a terrifying monster from folklore that would attack them, people began setting off fireworks and firecrackers in desperation. The monster called “Nian”, or “Year”, was scared of the loud noises produced, so people eventually began using firecrackers to celebrate good luck and ward off evil spirits. While this story has many variations, the monster’s name and the effect of the firecrackers are mostly agreed upon. In spite of concerns regarding air pollution and danger, Chinese people continue to happily set off fireworks throughout the entire holiday.

The jaded excitement for the New Year continues with family and friends at the dinner table, with plenty of feasting. The largest annual migration occurs around this time as an estimated 3 billion trips home were planned in 2019 alone for CNY. For the younger generation, the good feelings fade quickly, though. Although everyone enjoys spending time with their loved ones, topics of discussion often include talk of marriage from aging parents. This nagging has popularized the usage of online services for renting fake boyfriends/girlfriends by lonesome singles.

Economic Impacts

Given that Chinese New Year causes the largest annual mass migration in the world, it is bound to have a large economic impact. On a normal year, the holiday results in a seven day nationwide company shutdown. Since over 1.3 billion people celebrate the Lunar New Year, many East Asian countries go on vacation (i.e. South Korea, Vietnam, Singapore). The celebrating workforce of China and other countries causes slowed economic growth and heavily impacts the economic indicators at the beginning of the year. Regarding this, spokesman of the National Bureau of Statistics Mao Shengyong asserts, “the growth rate of the industry has to be factored out during the Spring Festival.” Dubbed the “impact of the Spring Festival movement”, the well-named phenom takes effect 4 to 5 days before the week-long celebrations and remains for 15 to 20 days after. According to Mao, the mass migration causes a surge of short-term employment, and the inherent nature of the holiday disturbs the retail market with an increase in pricing before and a decrease afterwards.

In anticipation of the crowds, Beijing and Shanghai have put forth new policies for public transportation, which is expected to bear the weight of 413 million railway passengers and 73 million flyers. The logistical nightmare of scheduling millions of trips home consistently burdens the country, and people returning for family reunions often fight over tickets home. With transportation full and companies understaffed, Chinese imports fall by over 20% each year during February. While manufactured goods for celebrations suffer the most, raw materials are least affected due to the lack of skill work needed. To put the economic drop into perspective, China alone holds 15.5% of the global economy. Despite the gloom and doom that normally plagues the regional economy during the holiday season, this year in particular has not been kind to the economy.

As the year of the rat begins, China is beginning to feel the strain of overpopulation and disease; the rapidly-spreading coronavirus has taken a massive toll on the holiday spirit. Due in large part to the communal nature of CNY, fear of infection has slowed celebrations and might force the Chinese government to extend the national holiday as it struggles to handle the outbreak. Such an extension will only prolong the gatherings going on around the country, though, putting more at risk of catching the virus. While no measurable impact has been had by the coronavirus on the Chinese economy, concerns are quickly rising. Already, many Lunar New Year celebrations have been cancelled or postponed as more coronavirus cases pop up in surrounding and Western countries. As the Hill reports, the SARS outbreak in 2003 hurt China’s GDP by 2 percentage points, and the coronavirus will likely have an even larger effect on the economy. Desmond Lachman of The Hill writes, “The last thing that a vulnerable world economy needs now is a further marked economic slowdown in China, the world’s second largest economy.”

On the other hand, many experts say not to worry too much. The fast action of organizations like WHO and the sweeping containment measures taken will hopefully cause the outbreak to be a short-lived, if high-impact, event. Oxford Economics’ Tommy Wu and Priyanka Kishore find that the economic impacts of the outbreak will put tourist-dependent countries like Singapore, Hong Kong, and Thailand most at risk of economic downturn. In a global climate with 90% of national economies currently reporting economic downturn, the small imbalance caused by the coronavirus might harm countries dependent on Chinese holiday tourism. For the sake of the global market and for the traditions that make Chinese New Year so distinct, let this brief blip in the Chinese economy will hopefully be just that--a blip.