China pushes paid leave to spur spending in face of sluggish post-Covid recovery

Shandong becomes latest local government to promote annual leave, which is guaranteed under law but taken by only 60 per cent of Chinese workers

The plan comes after Beijing issues measures to encourage holiday and leisure consumption

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Beijing is pinning its hopes on domestic consumption to balance weak external demand. Photo: AFP

Published: 6:00pm, 19 Aug 2023Updated: 6:34pm, 19 Aug 2023

A province in eastern China has become the latest local government to encourage businesses to encourage workers to take paid leave amid efforts to stimulate consumption by encouraging holiday spending.

The Shandong provincial government has pledged to “fully implement” paid leave and encourage off-peak holidays and flexible working hours “to boost holiday spending”, according to a consumption-stimulation plan issued earlier this week.

Late last month, the central government issued 20 measures with the same goal, including encouraging people to go on leave and to spend money during their leisure time.

By law, Chinese employees are entitled to annual paid leave as long as they have worked for more than one year, with a maximum of 15 days for those who have worked for 20 years or more. The paid leave is in addition to public holidays.

However, in reality, only about 60 per cent of workers actually took any paid leave, according to a post on the website of the Ministry of Human Resources and Social Security in August 2020, which cited a survey of 60 Chinese cities.

At least a dozen local governments have encouraged paid leave in directives in recent years in a bid to increase household spending as the world’s second biggest economy pins its hopes on domestic consumption amid weak external demand.

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