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This is written for an English speaking audience who are taken to have a different (probably “Western”) culture and ways of communicating than here in China. It covers what sort of communication can be expected in China, what tensions and misunderstandings may arise, and how to respond.
Being an obviously (Caucasian in particular) non-Chinese on the streets of China requires a lot of patience and tolerance, or else one may soon feel angry with and a distaste for the Chinese. Tolerance is one of the great virtues of the Chinese people, which allows so many people to live their lives in close proximity with a relatively low level of stress.
The frequent shouts of “hello” may seem to be a friendly gesture at first, but soon can become irksome. In the majority of cases the shout of “hello” has no purpose other than to try out the single word of familiar English that the unthinking shouter has, and to see what reaction the foreigner has.
Some Chinese, being very friendly in nature, cannot resist the urge to try to communicate with a non-Chinese. Unfortunately their attempts can often come across as ill-timed and rather obnoxious. Often shouts come from behind or way off to the side, are poorly pronounced and accompanied by giggles or a grin.
Sometimes the shouts of “hello” are from someone who wants to sell something or someone who wants to warn of a danger or let you know you’ve dropped something, and this is the only way they know to get the “foreigner’s” attention.
Usually the best way to respond to the multiple random greetings is a friendly “hello” or ignoring them completely if it is obviously someone trying to sell something you don’t want.
Don’t say “nihao” unless you want to start a conversation in Chinese or you want a (often not-well-considered) comment about how good your Chinese is.
If you use your Chinese, ignore the almost routine comments about how good your language skills are. They are seldom a good indication of your linguistic correctness, but just an encouragement to keep studying and a mark of appreciation for trying to learn Chinese. These comments often follow a mistake, so ignore the apparent insincerity.
Helpful criticism and correction are seldom given as it is seen as impolite and may make you lose face. In fact, when you are understood and there is an absence of such comments, then you have probably achieved the required level, and are starting to be treated like a Chinese speaker, instead of a foreign student. We have produced a guide to the Chinese language with a number of useful phrases.
If you get beyond “hello”, this will usually be someone who has approached you relatively politely (making eye contact and smiling) and is serious about trying to have a conversation or practice their English.
Chinese feel great pressure sometimes to take advantage of the opportunity to practice their English with any foreign-looking person. The pressure is often from parents who pin their hopes of family success, improving their standard of living and provision when they are old, on their children achieving good grades at school and getting a well-paid job.
If you get beyond the standard class text: “How are you? Fine, thank you. And you?” or the standard Westerner question: “What country do you come from?” you may have a contender for a good conversation.
If you feel you are about to be “used” for English practice again and are not interested in helping improve someone’s English, you could politely refuse, which doesn’t always deter the eager student (refusals are often not taken seriously unless repeated several times, which can be frustrating), and then don’t speak or make eye contact, which is the quickest way to show that the conversation opportunity is over.
Do not get angry or raise your voice. This is seen as incredibly bad manners in China and causes everyone to lose face. If you do want to have a conversation, then read on for some useful tips.
There are few qualms about revealing one’s age or one’s salary in China. You may also be asked if you are married and about your children. It is assumed that everyone should get married by about their mid twenties and everyone who gets married should have children (one child in China). Do not take offense at the surprise if you do not fit into this category.
You are very likely to be asked about your brothers and sisters. Family is very important in China. Chinese people are also not so sensitive about other topics that are less likely to come up in conversation, for example one’s weight. Politely evade such questions, or if you are someone who doesn’t mind revealing those sorts of things, then you may enjoy the freedom to talk about some things that you can’t back home.
Still, Chinese are not so open as to reveal exactly how much money they possess, for example.
Find common areas to talk about: family, sports, etc. – things that cross international and cultural barriers. Talk about what you like about your two countries.
Don’t verbally attack China and be careful about criticizing things there, as many Chinese will feel personally attacked by this, and therefore obliged to go on the defensive. Avoid political arguments, as many Chinese feel reluctant to speak or explore their true opinions about the current government, for fear of seeming disloyal to their country. There are also still many Mao fans in China. Don’t put them in an awkward position.
You may experience many strangers wanting to be your “friend”.
Friendship seems to start at a much more superficial level than in the West, and the exchanging of phone numbers and other contact details is quite common on a first meeting, even though the likelihood of a real friendship developing is very slim. Students and the young are often over-optimistic in this respect (optimism is a definite Chinese trait).
Many of these strangers hope to get some benefit (English practice, money, help to get to another country) through their relationships with Westerners (who you know is very important in China). Though this may seem very shallow, this type of networking it is the way a lot of business and other aspects of life carry on in China. There is a constant exchange of favors going on.
The Chinese like to address people and refer to people like members of their family even if they are not.
When Chinese talk about brothers or sisters they often mean cousins, so a few more questions about exact relationship are often necessary. Aunts and uncles refer to anyone of the generation older than themselves. Two generations their senior may be addressed as grandfather or grandmother. This can be confusing.
Teachers are often addressed as “Teacher”. Chinese also like to refer to friends of the same generation as “Small/Little ...” and those of an older generation as “Old ...”. This is only a familiar form of address and has no mocking or other connotation. Don’t take offense or find it strange if you are referred to in these terms.
“Thank you” is said a lot less than in the West. In a lot of instances, for example when someone opens a door for you or passes the soy sauce, saying “thank you” is seen as being over polite and without meaning, and is often met with requests for you not to be so polite (over-polite). Still feel free to express your gratefulness, but be prepared for such responses.
If you receive a gift, appear thankful to stop the giver losing face, and don’t open it until later, as this is bad manners in China.
Be careful when complimenting someone’s possessions or they may feel that you want it, and, so as to be a good host (the host is required to be very accommodating to the guest in Chinese culture), will feel obliged to give it to you.
“Excuse me” is not used as often in China. People are expected to give way naturally to one another on the street or when walking around, without anything being said. Personal space exists within oneself in China rather than in a meter (yard)-wide radius around the person. Being bumped or jostled when pushing through a crowd seldom produces an apology of any sort and is seen as a normal part of life (be wary of pick-pockets if this occurs).
Passing wind or loudly clearing one’s nose and throat is heard rather more than in the West. It is seen as something natural, and therefore isn’t followed by “excuse me”.
Interrupting somebody talking or doing something else to ask a question, make a request, etc. also happens regularly without any warning or apology.
People have the attitude that they don’t mind what other people do, so long as it is kept within certain limits (which evolve with society and everyone seems to agree on), and doesn’t affect them directly or enough to warrant a fuss. This creates a greater atmosphere of social freedom and harmony, and a minding of one’s own business.
As mentioned before tolerance is much higher in China than in the West. You may be left wondering why Chinese don’t help others more or intervene, verbally at least, if someone is doing something socially/morally unacceptable. Chinese wonder why Westerners stick their noses in other people’s business.
Being direct (particularly addressing something that is wrong), can often be considered rudeness in China (although it often produces the desired result!). Try to be “diplomatic” and tactful where possible, as the Chinese may be offended by Western “sharpness”.
The Chinese prefer to gently approach an important point, especially a point of tension (what might be seen as “beating about the bush”), or not to address it at all if it can be avoided. Do not judge the Chinese way of showing politeness as artificial and a waste of time, because it has its reasons, which can be found in respect and social harmony.
China is a shame culture, where it is a terrible thing to be criticized in public. (The West generally has a guilt culture, where right or wrong is of paramount importance.) Harmony (within oneself and with society) is also highly valued, so getting angry, or appearing to lose self-control, is particularly frowned upon. This is why in China the disorderly status quo prevails, like traffic on the street and queues for transport and services (until something really goes wrong that is).
The Chinese are a very practical people, who consider anything ok that gets them where they want to be and that is socially tolerated. Other individuals are not overly considered (the West values the individual, whereas Chinese consider their place in society first).
It is seen as obvious that one cannot please everyone, so pleasing oneself is the best option. If they come up against an obstacle or opposition, the optimistic and practical Chinese consider there must be an agreeable way to get over, around, under, or through the problem.
Many Chinese explain that you can do what you want here, with a certain assurance that things are the way they should be and a gesture of welcome. It often takes a specially assigned authority figure to create an artificial order at a busy crossroads or train ticket queues. Laws or rules are not considered a strict matter of right or wrong, and are frequently ignored, unless they are enforced.
The Chinese waiguoren, meaning foreigner, apparently has no negative connotations in China, although the word "foreigner" is used usually used by prejudiced people in the West to imply that people of different origins don’t belong, aren’t welcome and that they shouldn’t be there. This is not the case in China, whose inhabitants are generally a very warm and welcoming people towards outsiders.
However, the common use of this word (particularly referring to people with different facial features), shows that the Chinese have a strong national and ethnic identity. Note that it is almost unheard of for someone with non-Chinese features to have Chinese citizenship, and apart from in tourist hotspots, it is still relatively unusual to see non-oriental features in China. So, do not be offended at being labeled a foreigner. It is just a polite observation that you look different. (Japanese, Koreans, overseas Chinese or other similar-looking people are not referred to as foreigners, interestingly.)
The term laowai, literally translated as "old foreigner", is not derogatory. It does not imply that you look advanced in years or that the Chinese are tired of seeing your kind. It follows a similar source of meaning as the term laoba, referring to one’s father (or laoma, referring to one’s mother), where the word lao (old) implies respect and familiarity. The Chinese like to treat acquaintances or even strangers as part of "the family" to show acceptance.
Although talking about someone behind his/her back, or in front of them, but not to them, is considered rude in the West, it often happens in China, where it is acceptable for multiple conversations to take place between a group of people at one time. Chinese interaction can appear chaotic, but Chinese seem to prefer a greater level of noise and fewer restrictions in the flow of communication (take the scene in any well-frequented restaurant for example).
It is considered ok to stare at people (from other countries) and make comments about them within earshot. (There is of course the aspect that if the conversation is going on in Chinese, it is expected that it will not be understood, and therefore it shouldn’t be a problem.) Do not be paranoid, whenever you hear waiguoren or laowai, or are obviously being referred to without your participation or consent. It is best to ignore the attention that you are getting and not to take it personally. Tolerance is needed once again.
Rural or working class Chinese may talk (shout) like they're calling up a mountain or across a construction site for everyday conversation. Don't worry: this is not a sign of aggression or an argument, just force of habit, or possibly reduced hearing from being around loud machinery with no ear defenders.
As more of China's population are becoming "urbanized" and "developed" the noise problem is reducing, though, culturally, Chinese still like a noisy atmosphere in more settings than in the West. 
Poor English and spelling mistakes on signs, clothes, adverts, everywhere, are a common source for amusement, confusion, and criticism for the non-Chinese in China.
Generally, precise correctness is not taken too seriously as far as English goes. The English letters are seen by many as more a form of decoration and a token effort at being international than a genuine form of communication. This can be quite frustrating when reading restaurant menus sometimes! Before you judge this attitude as ignorant and careless, consider how Chinese characters have been used in the West.