Corporate Gift-Giving Enters New Era of Pragmatism, Individualism

With Black Friday in the rearview mirror and the holiday season fast approaching, this week seems like a good time to explore the changing face of corporate gift-giving in China. Such practices have undergone big changes over the years, largely in step with the country’s growing prosperity. More recently, Beijing’s anti-corruption campaign has also affected how and what people give to their business contacts, especially in the government and at big state-owned enterprises.

One of the most interesting findings in my poll of several contacts for this week’s column is that foreigners in China engage in a surprisingly wide range of gift-giving practices when dealing with their local customers. That harkens to a broader theme for foreigners doing business here in China, namely that we’re cut quite a bit of slack from Chinese under a mentality that I like to call the “ignorant foreigner” syndrome.

I use that expression in a positive sense, and acknowledge that it exists to some extent in any country where locals do business with foreigners. The bottom line is that foreigners here in China can get away with a wide range of behavior, in gift-giving and many other areas, that might be unacceptable for locals but are otherwise tolerated on the assumption that we don’t know any better.

A good example of similar mentality in the West might be, for example, if a Chinese tourist happens to give a small tip of just 10% at a US restaurant, contrary to the usual practice of giving 15%-20%. Perhaps the waiter would brush off such skimpiness as ignorance of local practices. Though that said, one of my Chinese contacts did recently relate a story of an encounter at a US restaurant where he was confronted quite directly by an angry waiter who thought the tip he left was too small.

In China, the attitude seems to be a bit more relaxed, which perhaps explains the wide range of gift-giving practices I uncovered in asking a few of my contacts about what they do. The biggest theme I discovered is that corporate gift-giving in China these days looks increasingly like that in the West, where you give something based on your relationships and own personal style. Not giving anything is even considered acceptable, though such a person might come across as slightly cheap.

The current landscape has come quite a ways from the one I encountered on first arriving in China back in the 1980s. Back then gifts were often more practical, and it was common to hear stories about people traveling abroad being asked to bring back all kinds of daily necessities as presents for their friends. Back then the idea of a nice bottle of wine or flowers would have been scoffed at as frivolous and a waste of money, though things like expensive liquor and cigarettes were happily accepted by certain status-conscious individuals and government officials.

The business landscape of the present seems to divide people into two categories when it comes to gift-giving, namely the private sector and the more official realm of government workers and big state-owned enterprise executives. It turns out the private sector, which has only really emerged over the last two decades in China, is much more similar to the West when it comes to corporate gift-giving.

Tokens of appreciation

The contacts I surveyed all described similar practices of giving presents like bottles of wine, fruit baskets, cigars or other tokens of appreciation, typically costing anywhere from around $10 to as much as $200, depending on the client and relationship. One of the two most important dates on everyone’s calendar was the Mid-Autumn Festival, typically in September or October, when some form of traditional mooncakes was the standard offering. But even then there was room for some personal touch, with one contact noting how he usually gave mooncakes from Starbucks to highlight his own status as an American.

The other big gift-giving day was the Lunar New Year in January or February, when offerings were a bit more varied. That’s probably because one of the most traditional gifts during the Lunar New Year is money-filled red envelopes, which have become a bit passe and even a no-no in the current climate, at least from foreigners. And as one contact pointed out, a CFO making hundreds of thousands of dollars per year is hardly likely to care about a red envelope stuffed with 500 yuan ($75) in cash.

Outside the Lunar New Year and Mid-Autumn Festival, the only other standard time of year for corporate gift-giving was the Western holiday season at the end of December. But that one seems to be optional, depending on how much a foreigner wants to emphasize his or her own foreign background. I also fished around for any strange gift-giving stories, but was slightly disappointed that practices have become boringly uniform in a relatively short period.

In one of the few humorous tales I could find, a contact related a story of giving some cigars to one of his clients, in the spirit of offering something that could be enjoyed together. The client then used the accompanying cigar cutter to cut off the cigar ends, and the pair began to smoke together. They began a scheduled meeting after that, when a “click-clicking” noise soon emerged from the client’s direction as he used the cutter to clip his fingernails!

One final point worth touching on is the recent changes brought about by Beijing’s anti-corruption drive, which has specifically targeted lavish gift-giving — effectively bribes — for officials from government agencies and big state-owned companies. Everyone I surveyed said such officials are quick to shun such gifts in the current climate, though many will still accept a reasonably priced bottle of wine or invitation to dine at a modest restaurant as real tokens of appreciation. The bottom line is that corporate gift-giving, like many things in China, is quickly falling into lines with Western norms, with a little extra wiggle room that gives foreigners space for more self-expression.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com