This Chapter details the protocol for exchanging gifts & favours between the Chinese and foreigners.

UNDERPINNING INFLUENCES AND BEHAVIOURS FOR EXCHANGING GIFTS AND FAVOURS

Correct observance is based on the following underpinning influences and behaviours:

Influence or Behaviour	See chapter
Collectivism	3
Connections (guanxi)	3
Corruption	1
Face (mianzi)	3
Forms of guanxi	3
Golden rule of Confucianism: reciprocity (shu)	1
Key concepts of Confucianism: generosity (ren)	1
Modesty and humility (keqi)	3

Of these, what most matters here is generosity, commended by Confucius (Analects 17):

‘Tsze-chang asked Confucius about perfect virtue. Confucius said:

“To be able to practice five things everywhere under heaven constitutes perfect virtue.”

‘He begged to ask what they were, and was told:

“Gravity, generosity of soul, sincerity, earnestness, and kindness. If you are grave, you will not be treated with disrespect. If you are generous, you will win all. If you are sincere, people will repose trust in you. If you are earnest, you will accomplish much. If you are kind, this will enable you to employ the services of others”’.

Reasons for exchanging gifts

Generosity takes many forms, of which two of the most obvious and tangible are: giving presents and doing favours – or rather exchanging the same, following Confucius’ golden rule of reciprocity and in the spirit of the Chinese proverb that: ‘courtesy demands reciprocity’, explained below.

Moreover, it is not the gift that counts, but the act of giving, according to the Chinese saying that: ‘the gift is nothing much, but it’s the thought that counts’ (li qing; ren yi zhong) – which is inspired by the following Chinese legend:

Once upon a time, a man went to visit a friend, taking a swan as a gift. On the way, the swan escaped; and the man, in trying to catch it, only managed to grab a feather. Rather than return home, he continued his journey with the feather. On receiving this unexpected gift, his friend was deeply moved by the story and the man’s sincerity.

Business is no exception: hence, an integral part of the Chinese business scene (at home and abroad) is exchanging gifts, for any of the following reasons:

• 1.Souvenirs to mark occasions.
• 2.Gratuities to show esteem or gratitude.
• 3.Payoffs to discharge obligations or accompany requests for favours.

Their common purpose is to build guanxi, for which reason giving gifts is not a ‘one-off’, but should be repeated from time to time.

Bribes

Gifts should never be taken or given as bribes.

In order, therefore, to avoid the recipient mistaking your gift for a bribe, you should stress your good intentions or gratitude, not the value of the gift – for which reason, when presenting a gift, you might say something like: ‘I have been truly overwhelmed by your extremely valuable help and generous hospitality; and would very much like you to accept this small token of my sincere appreciation and heartfelt thanks.’

Whilst this might seem so obsequious as to make Uriah Heap look like an amateur, it follows the Chinese tradition of ritual humility.

Similarly: to give a very valuable gift to a powerful individual, especially in private, is still highly risky for both the giver and recipient, despite stories to the contrary – namely:

According to the US Department of Commerce (Country Commercial Guide: China, www.usatrade.gov 2002):

‘Offering and receiving bribes are both crimes under Chinese law, but it is unclear if giving a bribe to a foreign official in another country is a crime… Based on surveys reported in the Western media and views expressed by foreign business people and lawyers in China, it is clear that U.S. firms consider corruption in China a hindrance to foreign direct investment…’

‘The 1979 Organic Law of the People’s Courts of the PRC authorised the establishment of economic courts’ with jurisdiction, inter alia, over ‘various economic crimes including theft, bribery, and tax evasion. In 1994, the lowest level of provincial courts started to try economic cases involving foreign parties. Foreign lawyers cannot act as attorneys in Chinese courts, but may observe proceedings informally’.

CHOOSING GIFTS

Although, as explained above, ‘it’s the thought that counts’, it is still important to select appropriate gifts and avoid inappropriate ones – particularly as giving the wrong gift to somebody you have not met before could cause offence.

Unsuitable gifts

• Black and white Black and white colours denote death and sorrow and – whilst acceptable as a background colour – should never be the dominant colour (e.g. all-white wrapping paper or ribbon).
• Cameras Cameras may need to be declared in writing on arrival in China, and may need to be shown again on departure (which could cause problems if they had been given away).
• Clocks In Chinese, ‘to give a clock’ (song zhong) sounds like ‘to pay one’s last respects’ (songzhong). Hence, some Chinese are very superstitious about exchanging clocks as a homonym for attending their funeral. However, not everyone in China shares this superstition.

Nevertheless, clocks are best avoided.

• Cut flowers Similarly, cut flowers are reminiscent of funerals and should be avoided.
• Fours Although even numbers are lucky in China, ‘four’ (si) reads like ‘death’ (si) in Chinese, and should, therefore, be avoided.
• Electric goods Importing too many electrical and electronic goods into China might arouse the suspicion of the Chinese Customs officials.
• Excessive value In accordance with the Chinese proverb, quoted above, that ‘courtesy demands reciprocity’, the recipient is similarly obligated to the giver. Thus, to give someone such an expensive gift that they cannot afford to reciprocate in like manner is to cause the recipient a loss of ‘face’.
• Green hats In Chinese, a man who ‘wears a green hat’ is a euphemism for a cuckold.
• Money To give money – even for a Chinese host’s child – would be at best a crude insult, and at worst misconstrued as an attempt at bribery and corruption.
• Odd numbers Contrary to Western tradition, odd numbers are considered unlucky – for which reason, wedding gifts and birthday gifts for the aged are always sent in pairs, following the old Chinese saying that ‘blessings come in pairs’.
• Pears In Chinese, a ‘pear’ is a homophone of ‘separation’ and should therefore be avoided.
• Tie pins, slides and cuff links In the days of the Mao jacket, tie pins, tie slides and cuff links were not appropriate. Today, however, with senior Chinese officials wearing Western dress more and more, such gifts are now quite acceptable.

Suitable gifts

Goods imported from the home country have prestige value and help win points in the ‘face’ game.

Although Western objets d’art are acceptable, they may turn out to be expensive white elephants, since the Chinese may not appreciate their artistic merit (not to mention the cost) – and are, therefore, best avoided.

Collective gifts

Visitors are expected to give presents to their hosts. In theory, the acceptable practice is for the visitors to present one large collective gift to the host organisation, rather than several small gifts to individual members. In this way, not only are the Chinese socialist principles of equality and collectivism satisfied, but also the risk of personal corruption (of the recipient) and bribery (by the giver) is avoided.

Individual gifts

In practice, however, it is now customary (instead of or in addition to a collective gift) for foreigners to give small individual gifts to members of a Chinese host organisation, who are allowed to keep them provided they are of nominal value.

In this regard, I suggest that the ideal individual gift for a Chinese official should be:

• Tasteful
• Modest value (say, not exceeding RMB 200, equivalent to US$25 or £15)
• Useful
• Small enough to carry without too much trouble

(See also: Appendix 4.1)

Many branded company mementoes fall into this category, such as:

• baseball caps (other than green!), desk sets, calendars, cigarette cases, cuff-links, diaries, lapel pins, lighters, mugs, name card holders, paper-weights, pens, pocket calculators, pocket knives, tape measures, tie pins/slides, ties and tote bags.

For very senior individuals whom you know well, suitable gifts might reflect their personal interests, such as:

• books (illustrated, or relevant technical texts, dedicated by your CEO), cassettes or CDs, cigarettes, liqueur, perfume, and stamps or coins (mounted) – all from the home country.

Individual gifts should correlate to the recipients’ status – for which reason, from my experience, I suggest the following guidelines for giving individual gifts:

• Do…

• carry a range of gifts, and in excess of the number of people that you expect to meet, just in case the Chinese delegation is larger and/or its members more or less senior than anticipated
• ensure that more senior individuals receive better gifts than their junior colleagues.

• Do not …

• leave anybody out, not even the driver: a company brochure is better than nothing.

Unusual gifts

Children

One way to melt someone’s heart is to give a small gift to their child, and the Chinese are no exception.

RECIPROCITY

In the spirit of the Chinese proverb, quoted above, that ‘courtesy demands reciprocity’, I suggest the following guidelines for exchanging gifts and favours:

• Do…

• ensure that gifts given in return for gifts or favours roughly correlate with the magnitude of the gift or favour received, so as not to cause a loss of ‘face’
• keep a balance, over time, between gifts and favours received and given
• before a banquet – when it is common for both sides to exchange gifts – let the Chinese know of your gift, to avoid the embarrassment of their coming empty-handed and being unable to reciprocate
• be wary of the expensive gift that precedes a request for a favour. With apologies to Virgil: ‘Beware of Chinese bearing gifts’.

• Do not…

• extend a light-hearted invitation to look you up next time the Chinese are in your home country. As one European businessman once found: you may be taken literally; and one day faced with an unexpected airfare and hotel bill for a mini-delegation out of the blue!
• accept a gift from someone for whom you have never done, and do not intend to do, a favour. To save the giver’s face: decline the gift politely (e.g. citing your company’s policy on accepting gifts; or the airline’s luggage allowance).

ETIQUETTE FOR EXCHANGING GIFTS

In China, gift-giving is an essential ingredient of courteous behaviour, with its own etiquette. The following are suggested guidelines for presenting and refusing gifts:

• Wrapping and presenting
  • wrap gifts in preferably red paper, cloth or a special presentation box; otherwise any other colour – except black or white – with a red ribbon
  • present gifts with a slight bow (by nodding your head, not bending at the waist) and both hands as a sign of respect and courtesy.
• Accepting In keeping with their tradition of public displays of modesty, the Chinese often make as many as three obligatory ritual refusal gestures when offered gifts, to avoid accusations of personal material gain – for which reason:
  • do not retract a gift unless you sense genuine reluctance (e.g. firm and/or more than three refusals)
  • do not reject unwanted gifts (unless unwelcome, as intimated above), but accept with a smile and thanks: you can always give them to someone else (the Chinese do!).
• Opening In accordance with the Chinese view that the thought counts more than the gift, as explained above:
  • do not open gifts in the presence of the giver, since to do so would draw attention to the gift and detract from the thought
  • open individual gifts in private – a practice that also saves your ‘face’ by not having to feign drooling over unwanted kitsch. Exceptionally, however, you may ask the Chinese to open your collective gift to them in public, explaining that this is a Western custom (which is now becoming more widespread in China).
• Timing
  • at a banquet: leave individual gifts at the place settings before the banquet begins present any collective gifts publicly and formally at an appropriate moment (e.g. coinciding with a toast)
  • at a meeting: present all gifts at the end first: any collective gifts, with much ceremony and many fine words then: individual gifts, in a more low-key manner.

GUIDELINES FOR REWARDING PERSONAL SERVICE

On occasions, you may wish to reward service personnel or your Chinese staff for outstanding personal service.

Tipping

In theory, tipping is officially forbidden in socialist China (where all are equal) as a patronising and exploitative act of a capitalist regime. Selfless service to the socialist motherland, not cash, should be sufficient motivation and reward for serving customers – which explains why customer service is at best indifferent, and occasionally blatantly rude.

In practice, however, local attitudes may change according to the moment and be at odds with government policy. Cash, not patriotism, buys goods. Thus, service personnel in many high-class places frequented by foreigners now explicitly seek tips, with an implicit alternative of poor service:

Where appropriate, I suggest these guidelines for rewarding outstanding service.

• Do…
  • consult your Chinese mentor
  • act discreetly and in private, to avoid putting the recipient in danger of being reported for, and/or accused of, flaunting the rules for personal gain
  • choose something small (not necessarily cash) that can be easily hidden in the recipient’s pocket.
• Do not…
  • act in front of other people
  • give what may seem to you a paltry gift or amount, but to the recipient could represent several days’ wages.

As with other gifts, refusal is part of the acceptance ritual, described above, which you will be expected to follow. If necessary, slip the tip into the recipient’s pocket. However, given government policy, do not persist if the refusal seems genuine, but trust the recipient’s instinct for the risk involved.

Staff gratuties

To reward staff members for exceptional service, work-related items or events are acceptable.

HELPFUL HINTS

Finally, from personal experience, I offer these tips for exchanging gifts:

• 1.Do not engrave a specific gift for a specific individual, just in case you never actually get to meet that person. Rather, engrave a separate plaque that can be subsequently attached to the gift: otherwise, you cannot give the gift to anyone else.
• 2.Keep a record of gifts and favours exchanged and refused, in order to monitor the balance and avoid repetitions.
• 3.When in doubt, consult your Chinese advisors, for whom – infuriatingly – choosing the right gifts may be the most important task in planning a delegation, meeting, banquet or similar event.

APPLICATION

All the foregoing protocols are specifically referred to again in subsequent chapters, as follows:

Protocol	See chapter
Exchanging gifts and favours	5, 6, 7, 8
Staff gratuities	10