China’s Golden Week, Trade Talks, and Hong Kong

Golden Week, the first week in October, is a significant holiday in China – second only to Chinese New Year, which is also sometimes called a golden week because workers generally get time off to visit families. Golden Week in October celebrates the founding of the People's Republic of China in 1949 and the annual harvest. This year marked the 70th anniversary of the PRC and was celebrated with a gigantic military parade in Tiananmen Square.

Consider how far China has come from the agrarian society of the last century to the industrial powerhouse of today. The development is truly astonishing. But all this industrial prowess comes to a halt for Golden Week, and people take to the roads, train stations and airports to visit their families. During Golden Week, most factories close and shipping of products, especially those things bound for the retail holiday season, slows considerably. Steamship lines and air cargo operations cut their schedules due to low shipment volumes. This year, trade talks between the US and China were postponed by one week to allow for the Chinese holiday. The U.S. also made a goodwill gesture by postponing the planned 5 percentage point increase in the tariff rate on $250 billion of Chinese goods to October 15 from the originally planned implementation on October 1.

Last week the trade talks continued in Washington. Insiders in Washington have not been very encouraging about the results, although the Chinese did agree to buy more U.S. agricultural products. Most China watchers say that the trade war won't be over anytime soon. The very patient Chinese are more likely to hang on for the long term. The U.S. Department of Commerce has announced even more sanctions on high-tech Chinese companies including video-surveillance and facial-recognition giants Hangzhou Hikvision Digital Technology, Megvii Technology Inc. and SenseTime Group Ltd. These sanctions are in addition to the current Huawei sanctions and won't help with the negotiation atmosphere between the U.S. and Chinese negotiators.

Meanwhile, the weekend violent protests continue in Hong Kong, where Hong Kongers continue to demand their independence from Beijing rule. Even though Hong Kong was turned over from British rule to China in 1997, Beijing has treated Hong Kong as an independent Special Administrative Region (SAR) for 20 years. Hong Kongers want to remain independent and are protesting decisions and oversight by pro-PRC leaders.

There are so many things to watch in global affairs right now, but supply chain professionals should keep their eye on China. The largest impact to many business operations will result from China's policies and its strategies such as the One-belt, One Road and Made in China 2025 Initiatives, and the continuing and escalating trade war with America. Stay tuned.

About the Author
Ms. Coates is the Executive Director of the Reshoring Institute and the President of Blue Silk Consulting, a Global Supply Chain consulting firm. She is a best-selling author of: 42 Rules for Sourcing and Manufacturing in China and Legal Blacksmith - How to Avoid and Defend Supply Chain Disputes Ms. Coates lives in Silicon Valley and has worked with over 80 clients worldwide. She is also an Expert Witness for legal cases involving global supply chain matters. She is passionate about Reshoring.

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