What should I expect when traveling in China during their Mid-August holiday?
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I would not worry too much about it.
The holiday you refer to is listed as "Mid-Autumn Day" on Wikivoyage and it is three days, which is not enough for major travels and I have not personally experienced anything crazy going on in Shanghai during that time, Beijing is likely similar. If you do want to travel out of Beijing on those days, you might still want to organize yourself ahead of time, but it is not a mass movement as for Chinese New Year or the National Holiday.
Caution should be taken when the festival falls to late September / early October as noted by Chinahighlights:
In 2016 it takes place on Sunday September 15th. Chinese people will have a three-day "public holiday" on the 15th and 17th — a normal weekend off for 5-day week workers, however...
When Mid-Autumn occurs at the end of September or early October its statutory day of public holiday is usually combined with the statutory National Day three-day holiday for a seven-day public holiday (October 1–7), sacrificing one adjacent weekend day ( for example, in 2015 people need to work on Saturday, October 10).
This will happen in 2017 but not 2016.
People gather with family and friends, either at home or outside, to eat and celebrate, see links below.
Further reading on the festival
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