Chinese Business Environment and Communications

Table of Content

Gift giving in China is an old tradition that covers both business and personal forms of giving. Along side the idea of Guanxi, it exists to nurture relationships on both a personal and business level. However as the Global Policy Forum (GPF) for the United Nations says, “in China the boundary between bribery and gift-giving is sometimes unclear. Corruption can also be a moral act. Such distinctions are complicated by a wealth of subtleties: the concept of the bribe has been splintered to mean many different things.” (GPF, 2000 [online])

It is important because, if you want to have effective business relationships in China, you need to know about the art of gift giving. (Quanyu, et al, 1994) In this essay, I will discuss the social practice and concept of gift giving and it’s links to corruption, and then discuss the significance of gift giving in contemporary China. In recent years, there have been numerous cases of corruption through gift giving and I want to look at a few of these and then discuss how to conduct oneself when receiving gifts without offending or being drawn into a corrupt situation.

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To understand the practice of gift giving, you need to know that the values and traditions of gift giving themselves come from its meaning to show respect and appreciation of social relationships and to demonstrate how much you value them. For years, the Chinese have believed that politeness demands reciprocity, meaning that people that you are courteous to will return favours with kind-heartedness. So whenever someone has received a present, they will try to offer one back at a suitable occasion. In China, this traditional practice is considered necessary to develop friendships and is used in conjunction with Guanxi or networking.

However, in a business setting, it can be frowned upon as a suggestion of bribery. Though this isn’t always the case, it is important to be considerate and properly sensitive when choosing a gift for a business setting. For a westerner who is unfamiliar with Chinese culture, it would be very easy for them to associate gifts with bribes and corrupt business practises. This however is, in the most part, wrong. What is interesting is that it is not just China, or China society that make use of this tradition, this happens in the West as well. What is significant here is the generally higher level of commitment of individuals to this system and the higher proportion of the individual’s income dedicated to these tokens. (Li, 1998)

There is another question that needs to be answered to further understand the link of corruption with gift giving. How big is the existence of corruption within Chinese society and why does corruption exist through the practise of gift giving? “With China rapidly changing from a state owned economy to a modern market-oriented one, corruption could hardly be avoided. All companies in China were originally run and controlled by cadres and military officials. At the beginning of the reforms, they were the only people who had assets and licences, and naturally they had no intention of giving up their privileges.

Therefore, many of them would only support new businesses is they could expect to make some personal profit too.” (Boos et al, 2003) Now however the traditional idea of Chinese gift giving has changed. While the social practise of gift giving still exists, more emphasis has been put on the business aspect of the practise. As the previous quotation from Boos says, because of the difficulties new businesses experienced due to the officials, they has to spend extra to get the officials to agree to business activities. Therefore, once this practise started, it became an expectation of the officials and this process of personal profit continued. However it has now spread to outside the roles of the official into more routine aspects of business dealings.

This expansion of business gift giving has now led to the following view and idea of business relationships. “In China, any business relationship should be considered from a long-term view. To maintain a long-term business relationship, one must reciprocate. One never knows when one will be in trouble and a friend in need is a friend indeed. This reflects the necessity of reciprocity.” (Reuvid and Yong, 2003) This has now become more of a case of making sure you’re protecting yourself and your business so that if something arises in the future, you know that you will have someone to call a favour from. To this extent, it has lost the idea of showing respect and appreciation towards others, but this can be expected to change when business and the market in China has changed too. There are however, still cases of innocent gift giving, which really are in place to nurture business relationships.

The theory of gift giving and the link to corruption can seem a little ambiguous. There are the obvious cases of corruption where money is exchanged or where someone is paying for an official’s son’s schooling, such as in the case of the jailed Banker Zheng Enzhao. This is obvious bribery and can no longer be linked to the values of gift giving. But there are cases that are still connected to the concept of gift giving and exist without actual money being exchanged. “In terms of Chinese law, to give gifts to government functionaries who execute official business and expect them to take advantage of their position and power to conduct illegal actions, could be considered to be bribery.” (Quanyu, et al, 1994) The actual difference between the act of symbolism and bribery is very subtle.

An example of how gift giving can be easily turned into a corrupt action is found in a BBC article. In China it is traditional to exchange Mooncakes to celebrate the mid-autumn festival. But in a China that has a thirst for extravagant gifts and items, Mooncakes have taken on a new role as a way of easily passing on bribes. “Mooncake gift sets are ever more extravagant, containing French wines, pearls and whisky, among other things. This year, one company is even offering a Mooncake set including a digital camera, a video camera, alcohol, a pen, a lighter and a 100 sq-m flat – for $40,000.” (Lim, 2004, [online]) These gift sets have been seen as an easy way of getting around the government’s corruption radar and had many people in uproar. This is just an example of how something very traditional is being used, but also the thought that is going in to it, shows how much bribery is used.

So finally, what do you do when conducting business in China and the issue of gift giving arises? One problem when receiving a gift is that there are repercussions if you refuse it. The sender will lose a lot of face in this situation, feeling perhaps that their present is not good enough and also feeling that he/she is looked down upon by the receiver. (Chee, West, 2004). This doesn’t only effect the giver, you, the receiver can loose face through refusal. This can also then lead to a break down of your business relationship. As you can see, the simple refusal of a gift, which most westerners would probably do to steer clear of any implications this concept can bring, isn’t the answer and doesn’t help you.

Within the Chinese culture, they have values and beliefs, which help the Chinese establish what a socially acceptable gift is. However for a foreigner to help keep on the right side of the line between symbolism and corruption, there are a few ideas to keep in mind. The first thing to remember is whom you are giving the gift to.

The gift should match the receiver’s status especially regarding the cost of the gift. Along with giving a cheap gift to a powerful person, which could insinuate that you feel they aren’t actually that powerful, giving expensive gifts to someone who isn’t high up will immediately bring questions to your business relationship. In addition, to help avoid any questionable reciprocity, you shouldn’t give presents to someone who is considered to be in a higher position or rank or who is more powerful than giver. However, after considering the situation, the question that follows is what to give and how.

Gifts and small souvenirs are often given and you should be prepared for this eventuality. Take something that is significant of your country or region as it is not the gift, but the giving that counts. (Dennis, 2003) This is the real value of the concept, the act of giving, not the value of the gift. Perhaps the western phrase, “it’s the thought that counts” is what businesses should keep in mind. One large gift to the host organisation sidesteps the problem of providing personal gifts for everyone. (Burns, 1998) This is a helpful suggestion but does limit your choices, an example would be a piece of art, not necessarily expensive, but that again represents your home country that they can then hang on an office wall. Also, you should only give gifts at the end of negotiations. Then you know that you haven’t affected the process or out come in anyway. Giving your gift at the end shows you feel it was a successful negotiation and it’s the beginning of relationship.

For a foreigner, their opinion of the concept of gift giving, especially in the business sense, is probably already over the line heading toward corruption, but you need to understand the culture and concept before you come to any conclusion. I feel that it is important to remember that the approach the Chinese have to business is very different to most of the rest of the world. Yes, the Chinese will understand that you will do things differently, especially with negotiations, the same way that we expect their actions to be different.

However, if you try to not only understand their way of business, but also try to use it, such as gift giving, there will be much greater respect given and at the end of the day, if you are serious about doing business in China, one of the best ways to demonstrate this is through showing that you want to understand their culture. Just like going abroad and trying to speak the language to show that you are interested in learning their way, showing knowledge of their culture will help you out immensely. However this means you won’t be able to avoid the eventuality of gift giving. I don’t see this as a problem. As long as you are prepared to give and to receive and you understand the situation, this can only lead to successful business relationships.

I believe that if you are conscious of the following specific factors in gift giving, the act of reciprocity within Chinese business practises will be made easier. Consider whom are you giving the gift to; what their position is in relation to the giver and what their role is within the business dealings, why are you giving a gift or what the event is, and finally how and when you are giving the gift such as at the end of negotiations.

I also think that the point mentioned before, where gift giving has become more of way to look after your business in the future, where you have given a gift so you can call in a favour in the future if needed, is very important. Doing business in China is very difficult and you will need all the help you can get to succeed, so using this new tactic in business gift giving could prove to be very useful. More importantly, this is still seen to be on the socially acceptable side of gift giving and not seen to be corrupt.

The line between symbolism and corruption is very thin and extremely ambiguous, especially for a foreigner to understand. Before you can recognize where the line is, you need to know the difference of both sides. The key to judging the difference between a gift and a bribe depends on your intentions, purpose, means and the result. (Quanyu, et al, 1994) I think this quote sums it up. As a foreigner to an extremely complex culture, you will probably never completely understand the theory of gift giving and other concepts. However as long as you understand what you want from your business relationships in China and keep in mind what is right and wrong as previously described, I feel you can definitely lead a successful business campaign.

References / Bibliography


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BURNS, R. (1998) Doing Business in Asia: A Cultural Perspective. Addison Wesley Longman Australia Pty Limited. Pg. 54, 55

CHEE, H, and WEST, C. (2004) Myths About Doing Business in China. Palgrave Macmillan. Pg. 51.

DENNIS, B. (2003) China: The Business Travellers Handbook. Gorilla Guides. Pg. 98.

Global Policy Forum

(2000) Exchange, Bribery and Gift-giving [online]

Available at:

[Accessed 5th March 2007]

Li, C. (1998) China: The Consumer Revolution. John Wiley and Sons Ltd. Pg. 14

LIM, L. BBC News

(2004) Corruption fears over China Mooncakes. [online]

Available at:

[Accessed 6th March 2007]

QUANYU, H. AUDRULIS, R. S. and TONG, C. (1994) A Guide to Successful Business Relations with the Chinese. International Business Press. Pg. 215, 218, 219.

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(2005) China Guide: Business & Culture [online]

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[Accessed 5th March 2007]

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