Commentary: To Spur Its Economy, China Needs a Vacation

The article focuses on the relationship between leisure time, vacation policy, and consumer spending in China, emphasizing the need for vacation system reform to boost economic growth and improve quality of life. Time, alongside income, is crucial for driving consumer spending, especially on services that are inherently time-intensive. Consequently, with China facing economic challenges characterized by weak consumption, the central government has prioritized upholding workers’ vacation rights, as stated in the Special Action Plan to Boost Consumption. The article first identifies problems with China’s current vacation system, then discusses the significance of leisure time from an economic perspective, and finally offers targeted recommendations for improvement. [para. 1]

Chinese workers experience three major vacation-related issues: insufficient days off, poor quality of rest periods, and difficulties in taking entitled leave. Legally, most Chinese employees have 122 to 132 rest days annually—this includes weekends, public holidays, and paid annual leave—but these statistics do not reflect the actual experience, as many workers don’t fully use their entitled time off. [para. 2][para. 3]

The Chinese vacation system has evolved over 76 years, even leading some developed nations in certain areas (such as instituting a two-day weekend in 1995, ahead of South Korea). However, current structures now constrain consumption growth. For instance, the typical workweek for corporate employees in 2023 was about 49 hours, amounting to 2,500 hours per year—significantly higher than the OECD average of 1,717 hours and even more than Mexico’s 2,323 hours. Chinese workers, working longer hours than their global counterparts, enjoy fewer rest days and suffer from poor access to discretionary time. [para. 4][para. 5]

The disparity extends to daily leisure, too. According to a 2024 survey, Chinese residents average just 3.5 hours of leisure daily, falling well short of Europe (over 5 hours), the US (4.7 hours), and Japan (4.6 hours). Surveys show particularly limited leisure time in major cities such as Shenzhen, Guangzhou, Shanghai, and Beijing. [para. 6]

Key issues include insufficient paid annual leave (average of 10 days, compared with 20–30 in EU nations), uneven holiday distribution (with most holidays in the first half of the year and none in July–August or November–December), and the prevalence of “make-up” workdays that erode the real duration and quality of holidays. Furthermore, nearly half of Chinese workers cannot fully utilize their vacation entitlements, diminishing effective leisure even more. [para. 7][para. 8][para. 9][para. 10]

Growing leisure time is vital for three reasons: economically, it can stimulate consumption by raising the proportion of service spending (Chinese service spending was 45.2% in 2023, compared with 66% in the US); it boosts labor productivity and innovation by curbing burnout and creating space for learning and creativity (e.g., a shift to a five-day week increased productivity in Chinese companies); and it has profound social benefits by easing survival anxiety and potentially increasing fertility rates, as excessive work hours deter family life. [para. 11][para. 12][para. 13][para. 14]

Recommendations include adding more public holidays (e.g., Qixi and Chongyang Festivals), optimizing the make-up workday system, expanding flexible work arrangements (such as “core hours” and leave banking), and enforcing paid leave regulations via labor inspections and compliance monitoring. [para. 15][para. 16][para. 17][para. 18]

The author, Luo Zhiheng, is Yuekai Securities’ chief economist, and the opinions expressed do not necessarily reflect Caixin’s views. [para. 19][para. 20]