China has begun implementing an official policy for a 4.5-day working week as part of an effort to increase domestic consumption and leisure spending.

Chongqing is the first city taking steps to reduce the working week to 4.5 days. The 30 million people living in the municipality in China’s south-west will enjoy a two-and-a-half-day weekend. Hebei and Jiangxi provinces are also considering giving workers a longer weekend.

The idea was endorsed by China’s state council in August and is part of a national plan to increase consumption. It is hoped that by giving people more time off, they will spend money and provide a boost to the economy.

The largest proportion of Chinese consumers’ income goes on clothes, food and home improvements. But government officials believe that there is potential for growth in leisure spending.
151012-china us consumer spending forum chart

Source: Euromonitor, CEIC, Goldman Sachs Global Investment Research

Following the introduction of the 4.5-day working week, local economies are expected to see a boost in domestic tourism revenue, particularly during the summer months.

Domestic tourism generated nearly half a trillion US dollars for China’s economy in 2014 – far more than the amount Chinese tourists spend overseas. The extended weekend, which is expected to come into force in the summer, will give workers more opportunities to travel and spend money within China.

1512B21-china domestic tourist spend

The move is not expected to cost the economy – taking a half day off won’t translate into doing less work because employees on 40-hour contracts will still complete their normal set of hours. The government will allow organizations to manage the scheme as they see fit, and it will be up to each company to implement the policy according to their own “circumstances”. The government is encouraging commitment to the scheme from state-owned organizations, private enterprises and public-sector offices.

China is not alone in its decision to implement a shorter working week. A handful of tech companies have introduced four-day weeks in a bid to increase job satisfaction and boost staff morale. There are reports that some firms have seen an increase in revenue as a result of the extended weekends.

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Author: Emma Luxton is a Digital Content Producer at Formative Content. 

Image: Attendants stand in a line to pose for a picture outside the Great Hall of the People in Beijing. REUTERS/Jason Lee.