Monetary Gift givingComparison between Chinese & British Culture

among University students in UKBy

Shantanu Krishna

MSc International Marketing, Spec. Customer Management

Strathclyde Business School, UK

Lecturer-International Business, Rai Business School, New Delhi

Executive Summary

In this era of globalization, where growing importance in understanding the cultural differences and prefer-

ences of the people to maintain and develop long lasting relationships have become imperative. This study at -

tempts to investigate the differences in the gift-giving behaviour among Chinese and British people. Cross cul-

tural issues on the gift giving behaviour have been examined by researchers with a strong emphasis on gift-

giving in the business context. No specific study comparing the Chinese and British culture could be

found. Despite the large amount of general information on gift giving no literature was available on

monetary gift giving comparing the differences between the Chinese and British culture. This

paper also identifies a potential area of further research to understand cross cultural issues

in sustaining effective CRM practices across cultures.

Being aware of the identified research gap a suitable research method was adapted. A short ex -

ploratory qualitative research in form of a focus group was conducted. Based on the findings

from the literature review and the outcomes of the exploratory research a questionnaire was de-

signed and a face-to-face survey was carried out.

II

Introduction

This report will investigate the differences of monetary gift giving behaviour in the Chinese and

British culture. Although a lot has been written about gift giving since the 1970’s, only few stud-

ies have concentrated on the monetary aspect with even less conducting an empirical research.

Qualitative research in form of a focus group was initially used to increase the understanding of

the subject and then further investigation was done through 50 face-to-face questionnaires with

British and Chinese students at the University of Strathclyde. Results were analysed with SNAP

and SPSS. The Chi-square test was used to test the significance of the differences of the results.

With regards to the attitude question which is based on a Likert scale, the t-test allowed to de-

termine the differences of the means. The results were then interpreted, put into context with the

gift giving literature and findings were used to explain to what extent and in what ways there is a

cross cultural difference in monetary gift giving behaviour. Limitations and recommendations

have been drawn and areas of interest for future research are indicated.

1 Gift Giving

1.1 Literature Review

Gift giving is defined as the “voluntary transfer from one person to another without compensa-

tion” (McGrath, 1995). This old custom, which occurs in all societies, is nowadays an integral

part of our daily life. Gift giving is not only an economic transaction, but a process of high-con-

text communication that conveys rich, symbolic meanings and is a medium for social interaction

and personal expression (Wang et al., 2001; Allan, 2003). With the average US household

spending 4% of its budget on gifts (Park, 1998) it is an industry that cannot be neglected.

Despite the worldwide spread of gift giving, Waldfogel (1993) argues that non-monetary gifts

make little sense from an economical point of view and are a source of potential deadweight loss.

Since gift decisions are always made by someone else than the final customer, the recipient’s

preferences might not be met with the non-monetary gift. A monetary gift, which can take the

form of cash, vouchers or cheques, avoids this deadweight loss. This reduction of deadweight

loss can partly explain why vouchers have become increasingly popular as gifts.

According to Scammon et al. (1982) four primary functions of gift-giving can be identified. One

function is gift giving as communication between gift giver and receiver. As gifts are often

means of showing respect and honour for the recipient the choice of the “right” gift is very im-

1

portant for the giver in order to transfer the desired message from the giver to the recipient. Fur-

thermore, gifts can be used to communicate how important somebody is to the giver and the

choice of the gift provides information about him. In order to prevent a misunderstanding in the

gift giving communication givers are likely to choose gifts which are considered to be accepted

by the society and are therefore “safe” (Scammon et al., 1982). Another function of gift giving is

the facilitation of social exchange. This is particularly relevant on gift giving occasions and often

serves as a symbol of social support. When gift giving is seen as an obligatory reciprocal ex-

change between two people it is an economic exchange. Finally, gifts are also given as a mean of

socialisation. In this context gifts are given to people in order to express social connection and

symbolise relationship in rites (Scammon et al., 1982; Ertimur, B. and Sandikci, O. 2005). Self-

gratification has been identified as a fifth function of gift giving by Mick and DeMoss (1990).

They argue that people buy “something nice” for themselves in a number of different circum-

stances such as when feeling depressed or wanting to reward themselves.

Even though most gift giving studies concentrate on women, research in gender differences has

been undertaken. Fischer and Arnold (1990) showed that women are more involved in Christmas

gift shopping than men. McGrath (1995) supports these findings as she argues that women have

more intimate exchange relationships than men.

Gift giving is a practice which is very sensitive to the cultural, ethical and legal environment and

therefore varies across different cultures (Wang et al., 2001). Hofstede’s (1983) model gives in-

sights into the differences between the Chinese and the British culture. In the Chinese culture, an

individual is inherently connected to others and fosters relationships through reciprocity, senti-

ment, and kinship network (Joy, 2001). Chinese philosophical thought is largely influenced by

Confucianism and emphasises that people should align their behaviour with their social roles to

maintain harmony in interpersonal relationships (Allan et al., 2003). These traditional values em-

phasize the importance of compliance to social norms over individual recognition and achieve-

ment and of family security and affiliation (Wang et al., 2001). In other words, the Chinese ex-

perience themselves as interdependent and willing to make sacrifices for maintaining communal

harmony (Joy, 2001).

Looking at the influence of the culture on gift giving, Wang et al. refer to Yau (1988, 1994 cited

in Wang 2001) who identified three concepts in the Chinese gift giving culture. The first one is

the concept of face which implies that the giver looses his face when offering a gift which does

not match to the recipients standing in life or prestige. The concept of GuanXi refers to gift giv-

2

ing as a process for building relationships throughout individuals in professional and public

lives. The last concepts is the already mentioned concept of reciprocity which implies the re-

turned gift giving at an appropriate time of a gift with at least the same value what is expected in

return (Wang et al., 2001). As a result of these three concept, Park (1998) concludes that because

of group conformity and face-saving needs, there is a high degree of social pressure in the Asian

gift-giving behaviour.

In contrast to that the British culture is characterised by a very high degree of individualism

(Hofstede, 1993). Ties between individuals are therefore much looser, the level of loyalty is

lower and the conformity with the group is less important in the UK than in collectivistic cul-

tures such as China. According to Park (1998) this influences and explains differences in gift

giving between individualistic and collectivistic cultures.

Belk (1984) states that cross cultural differences in concepts of self, affect attitudes in the gift-

giving behaviour. In western cultures it is common to asses the identity of self based on indi -

vidual characters such as different symbols of individual status whereas in other cultures the the-

ories of self are developed more by the view that people make part of a cohesive whole. In cul -

tures where identity tends to be collectivistic, gift giving has the three function of establishing

and sustaining social linkages, limiting envy through sharing and giving to extended self (Belk

1984). In contrast to that, in individualistic societies gift giving helps transmitting the self

concept outside the family. This means that in these cultures gift giving is more an action that re-

flects the giver’s concepts of self than enhances an identity which is based on the group (Park

1998).

Differences of gift giving behaviour between cultures can be seen in both, the personal and

the business environment (Arunthanes et al., 1994). With the increasing globalisation of

today’s world, the understanding of gift giving concepts in different cultures becomes more

and more important, in particular for business relationships. In the British culture, relation-

ships are developed after the business is done whereas in China the relationships are developed

before the business is established (D’Souza, C. 2003). Giving gifts in China is therefore seen as

compulsory for the establishment of business and personal relationships. Contrary to that, gifts in

the British business context are often not well accepted and can even be seen as a form of bribery

(D’Souza, 2003).

Other than differences in the motivations of gift giving, the literature suggests that the types of

gifts also vary across cultures. According to Liao and Huang (2006), a red envelope containing

3

cash is a very common gift in China that is socially accepted and economically supports the re-

ceiver. Ting et al. (2005) even suggest that most Chinese think a monetary gift is not only con-

venient but also substantial, whereas a receiver is difficult to satisfy with a non-monetary gift.

Therefore cash is seen as a gift for what the gift search effort is low and which avoids loosing the

giver’s face by choosing the wrong gift item (Park, 1998).

In the UK, an enormous amount of money is spent on gifts which are generally of non-monetary

character (Prendergast and Stole, 2001). The reason for non-monetary gift giving is that the

thought counts more than the actual value of the gift. The donor is expected to spend time on

searching for an appropriate gift for the recipient (Prendergast and Stole, 2001; Belk, R. 1976).

Waldfogel (1993) states that in individualistic countries, monetary gifts are often seen as imper-

sonal, reflect the donor’s lack of personal knowledge of the receiver and show little willingness

to spend time to find an adequate gift. According to Predergast and Stole (2001) people give

non-monetary gifts to illustrate to what degree they know the personal preferences of gift re-

ceiver. Therefore the symbolic value of the gift has more importance than its economic value

(Ertimur and Sandikci, 2005). As a result of these factors monetary gifts often appear as inappro-

priate and impersonal. They are usually given only in certain contexts such as weddings or when

the desires and needs of the recipient are not well known (Ertimur and Sandikci, 2005).

1.2 Research objectives: This upcoming research is primarily concerned with

1.2.1 A comparative study of the British and Chinese monetary gift-giving behaviour.

1.2.2 Analysing whether the monetary gift giving behaviour would differ because of cross-cultural differences between the two countries.

2 Methodology

2.1 Research approach and design

The design and execution of the research is of high importance in order to capture the differences

in the cross-cultural monetary gift-giving behaviour. A combination of an exploratory and con-

clusive research approach was determined to meet the research objectives.

2.2 Questionnaire design

A questionnaire was developed in SNAP based on secondary research and the outcomes of the

exploratory qualitative research. Its aim is to generate the necessary data to answer the research

question mentioned above. Using the same questionnaire for both Chinese and British respond-

ents ensured the validity of any comparisons of different respondents’ answers.

4

The questionnaire contains closed and scaling questions only. Open-ended questions were

avoided due to their drawback of being difficult to analyse and interpret (Wilson, 2006).

As recommended by Wilson (2006) the design of the questionnaire follows a funnel sequence

going from general to specific questions. Wordings and phrases were kept simple and straight-

forward in order to avoid any ambiguity.

2.3 Sampling design and interviews

According to the research objectives and instructions from the Marketing department the target

population for the research has been defined as all Chinese and British Strathclyde University

students, no matter what age, course of study or sex they were. A further criterion, the necessity

of a participant to be either a British or Chinese citizen, was introduced by the researchers. In ad-

dition, a participant had to give their consent to conduct the interview. If any of these criteria

were not fulfilled, the interview was not continued.

To identify the target group, screening questions were developed where participants were asked

about their nationality in addition to whether they wanted to participate in the interview.

Because of budget and time constraints, a convenience non random sampling method was adop-

ted (Wilson, 2006), as the most accessible members of the population of interest were selected.

In accordance with the guidelines stipulated by the Marketing department the sample of respond-

ents was restricted to a total of 50 personal interviews inside the University of Strathclyde.

3 Analysis

3.1 Overview of Results

After completing 50 questionnaires the data was entered into SNAP and exported to SPSS. SPSS

was used to analyse the data rather than SNAP because of SNAP’s restricted analysis capabilit-

ies. SPSS offers a wider range of possibilities to analyse the data and portray the results.

Chi-square analyses, t-tests, Cronbach’s coefficient Alpha and a correlation test were performed

comparing the two cultures where appropriate on the gift giving variables. Several significant

differences could be identified in gift giving behaviour between respondents from the two coun-

tries.

Monetary gift giving

5

Using a Chi-square procedure, the first three questions were compared across genders, age, na-

tionality and years of work experience. No significant differences have been found on any of the

analysed variables. The results have to be interpreted with caution, as there were warnings that

more than 20 percent of cells had expected values less than five. Most British and Chinese stu-

dents prefer to give non-monetary gifts while there is no clear preference of kind of gifts re-

ceived. The majority of people of both cultures tend to receive non-monetary gifts.

While using a Chi-square procedure to compare what kind of monetary gifts people usually give

across genders, age, nationality and years of work experience, significant differences were found

for nationality and work experience. Chinese citizens more often give cash directly as a gift than

their British counterparts, who tend to give vouchers or avoid monetary gifts. (Chi-square=9.934,

df=1, p<.01). In addition, everyone with more than two years work experience has given monet-

ary gifts to others, while more than a half of the people who do not have any work experience

have never given monetary gifts (Chi-square 10.979, df=2, p<.01).

Monetary gift giving and non-monetary gift giving to different people on different occa-

sions.

The following analysis will focus on what kind of gifts (monetary or non-monetary) are given to

whom and on what occasions.

Graph 1 shows that the proportions of the kind of gifts given, varies between the British and the

Chinese gift givers. British people prefer to give less monetary gifts and more non-monetary

gifts than Chinese. It was also noticed that the majority of gifts in Britain are non-monetary and

one third of the gifts given are monetary in China.

Graph 1: Types of gifts given by Chinese and British people.

6

Another difference concerns the receiver of a monetary gift. In the Chinese culture, family mem-

bers more often receive monetary gifts than in the British culture (Chi-square 5.867, df=1,

p<.05). Graph 2 shows that the total number of British and Chinese people that give gifts to their

family members is the same. However British people are more likely to give non-monetary gifts

to their family, whereas Chinese have a preference to give more monetary gifts. This portrays the

strong family bonds in a collectivistic culture such as China.

Graph 2: Types of gifts given to family members for Chinese and British people.

It is interesting to note that, a difference in giving gifts to other family members exists among

people having a different length of work experience (Chi-square 9.180, df=2, p<.01). 86 percent

of the respondents having no work experience tend to give non-monetary gifts to other family

members. For people having less than two years work experience, no clear preference of type of

gift to family members can be identified. Following that trend, the group of people having more

than two years work experience has a strong preference of giving monetary gifts. Based on the

comparison above, it can be concluded that the more work experience people have, the more

they are inclined to give monetary gifts, no matter what culture they come from (Graph 3).

7

Graph 3: Types of gifts given to other family members based on length of work experience.

Looking at the different occasions on which the British and Chinese give gifts (Graph 4), it be-

comes clear that there are more gift giving occasions in China. In addition, on more of these oc -

casions it is common to give monetary gifts than in Britain.

Graph 4: Gift giving in different occasions.

In the list of occasions, Baby Announcement is not applicable for Chinese on which, no British

will give monetary gifts. On the other hand, British do not have Chinese New Year, Reception of

University Offers, Child Birth / One month after Birth, Teacher’s Day and Children’s Day.

8

In the 17 occasions listed in the graph above, 12 of them were selected to compare across coun-

try by using Chi-square tests (see Table 1). In this Chi-square test, the variables of non-monetary

gift, no gift and not applicable were recoded into a same variable in order to avoid warnings. The

excluded five gift giving occasions are the ones where no monetary gifts are given at all.

Table 1: Chi-Square Tests Matrix – Significance of differences of type of gifts given between Chinese and British people on different occasions

Occasions Value df Asymp. Sig. (2-

sided)

Warning

Anniversary 0.222 1 .637 *

Birthday 0.136 1 .713

Child Birth/ One month after Birth

21.429 1 .000

Chinese New Year 28.125 1 .000

Christmas 1.020 1 .312

Father's day 1.495 1 .221

Funerals 15.789 1 .000

Get University Offers 6.818 1 .009

Graduations 0.166 1 .684

Housewarming 5.357 1 .021

Mother's day 5.556 1 .018

Wedding 6.650 1 .010

* More than 20% cells have expected count less than 5

As shown in table one, there are significant differences in gift giving when someone gets Univer-

sity Offers, housewarming and mother's day between British and Chinese. The results marked

9

with an asterix have to be interpreted with prudence, as more than 20 percent of the cells with

expected count of less than five.

It is important to point out that 60 percent of Chinese will give monetary gifts on child birth or

one month after birth, while British do not give gifts on such occasions (Chi-square 21.429,

df=1, p<.001). On Chinese New Year, Chinese people exclusively give monetary gifts, whereas

the British do not celebrate this occasion at all (Chi-square 28.125, df=1, p<.001).It is a Chinese

custom to give monetary gifts in the two occasions for bringing luck to the receiver.

For funerals, Chinese either give monetary gifts (48 percent) or nothing at all. This is an occa-

sion where British people do not give gifts (Chi-square 15.789, df=1, p<.001). It seems that this

is a way Chinese people give assistance to the families of the deceased and again stresses the

high degree of collectivism which leads to a strong family and group cohension.

Another distinct difference between the Chinese and the British culture is the type of gifts given

for a wedding (Chi-square 6.650, df=1, p<.01). 26 percent of British citizens will choose a mon-

etary gift for a newlywed couple whereas 88 percent of the Chinese will give monetary gifts.

Again, it is a tradition in China to give monetary gifts when attending a wedding, which not only

means good luck but also is a form of assistance for the newlywed people to form new families.

Overall, Chinese people have more gift giving occasions and are more likely to give monetary

gifts than the British due to the fact that for several occasions the tradition demands a monetary

gift.

Motivations for gift giving

Seven items in the questionnaire aimed to find the different motivations for giving gifts, espe-

cially monetary gifts for Chinese and British. The respondents were asked to give their opinion

on certain statements. An inter-item correlation analysis was conducted (Table 2) to find the cor-

relation between the seven statements asked in the 5-point Likert scale. The first three items (X1-

X3) strongly reflect the Chinese values of face saving, reciprocity and group conformity whereas

the last three items are more applicable to the British culture.

The inter-item correlation matrix shows that respondents who agreed to X1 tend to agree also on

the statements X2, X3 because the correlation between these statements is significant. This

stresses the fact that these three statements are strongly related. Respondents who tend to agree

on the second items (X2) are likely to agree also on X1 and X3 and with a reduced significance

also tend to agree to X4. People who agreed on statement X3 are very likely to agree as well on

X1 and X2. These correlations strongly stress the assumption that the first three statements re-

10

flect one specific culture, namely the Chinese. Statements X4 to X6 are strongly correlated again

which allows the assumption that these three statements build another block, which could reflect

the British gift giving behaviour. X7 shows very little overall correlation. It becomes clear that

people who agreed on statement X7 tend to disagree on statement X6 due to the negative signi-

ficant correlation. Therefore, people who value monetary gifts more than non-monetary gifts

usually disagree on the statement that they value more the thought and effort behind a gift than

the value of it. Consequently, motivations for monetary gift giving behaviour can be divided into

two blocks (X1-X3) and (X4-X6).

Table 2: Inter-Item Correlation Matrix.

X1 X2 X3 X4 X5 X6 X7

It is common in my

culture to give mon-

etary gifts. (X1)

1.405(**

)

.549(**

)-0.035 0.019 0.238 0.058

It is expected of me

to give a monetary

gift if I have re-

ceived one previ-

ously. (X2)

.405(**

)1

.465(**

).310(*) 0.174 0.141 0.097

There is a lot of so-

cial pressure to give

monetary gifts. (X3)

.549(**

)

.465(**

)1 0.04 0.234 0.181 0.123

I give monetary gifts

when I do not know

the preferences of

the receiver. (X4)

-0.035 .310(*) 0.04 1.635(**

)

.503(**

)-0.118

I give monetary gifts

when I do not have

enough time to look

for a non-monetary

gift. (X5)

0.019 0.174 0.234.635(**

)1

.394(**

)0.019

11

I think monetary

gifts are more valu-

able/ useful than

non-monetary gifts.

(X6)

0.238 0.141 0.181.503(**

)

.394(**

)1

-.409(*

*)

I value the thought

and effort behind a

gift more than the

value of it. (X7)

0.058 0.097 0.123 -0.118 0.019-.409(*

*)1

** Correlation is significant at the 0.01 level (2-tailed).

* Correlation is significant at the 0.05 level (2-tailed).

Applying a reliability test the researchers tried to find out how the series of items in this question

taken together are a reliable indication of the concept. The Likert scale question is designed to

indicate and how the items can be related to the research topic. In order to achieve reliable res -

ults a Cronbach’s Alpha of a value above 0.7 must be achieved.

Taking all seven items (X1-X7 Inter-Item Correlation Matrix) used in the 5 point Likert scale

into consideration gives a reliability of α=.641. An α < .7 is regarded as marginal, the researchers

considered taking only items with “Cronbach’s Alpha if item deleted” lower than the current α

(X1-X6). Therefore, the statement X7 was deleted in order to increase the reliability of the items

to an acceptable value of α >.7 which leaded to an increase of reliability of the items (α = .703).

This outcome does not surprise because looking back to the Correlation analysis it was already

assumed from the inter-item correlation matrix that the last items shows little relationship with

the other items. The remaining six items (X1-X6) are perfectly related to the research topic and

can be used as a reliable indication to explain the differences between Chinese and British gift

giving behaviour.

According to the outcome of the correlation and reliability analysis the researchers applied a T-

test focused only on the first six items (X1-X6). It is more common in the Chinese culture to give

monetary gifts than in the British culture (mean-china=1.80 vs. mean-British=3.00, t(50)=5.041,

p<.01). Expectations for reciprocal of monetary gifts are higher for Chinese people (mean-Brit-

ish =3.08 vs. mean-china=2.28, t(50)=3.065, p<.01). The main reason for this attitudes seems to

be the Chinese tradition and the social pressure present in collectivistic cultures. The reciprocity

12

and the strong group cohesion expressed in this behaviour are therefore characteristics of the

Chinese monetary gift giving behaviour and are strongly connected to the culture. This fact can

also be explained by the high importance of the tradition in the Chinese culture (Mean –

British=3.44 vs. Mean-china=2.28, t(50) =3.395, p<.01).

Graph 5: Error Bars assessing attitudes.

A further outcome of the T-test was that Chinese and British showed very similar opinions in the

statements X4-X6. These three items were describing behaviours likely to characterise the Brit -

ish gift giving culture. As no differences have been found, it must be assumed that British values,

such as valuing a non-monetary gift higher and only resort to monetary gifts under certain cir-

cumstances, have either become universal or were adopted by Chinese students living in Britain

through the acculturation process. These outcomes strongly support the assumptions made in the

correlation analysis where X1-X3 showed a high inter-item correlation as well as X4-X6.

4 Conclusion and Future Directions

This study has investigated the cultural differences between the British and the Chinese culture

mainly focusing on their monetary gift giving behaviour. The results give an idea of the cultural

differences in terms values of Confucian collectivism and individualism. Contrary to Chinese,

British projected the individualistic characteristics, which are also reflected in the kind of gifts

they like to buy and their motivational aspect behind the purchase of a gift.

There also exists a striking contrast between both the cultures in the type of gifts given and the

occasions on which those gifts are given. Chinese people prefer giving monetary gifts to their re-

latives, friends and other people and have much more occasions to give those gifts than the Brit -

13

ish people. Although there are occasions on which British people also give monetary gifts like,

graduations, Birthday and weddings, it was quite interesting to note that the motivational aspect

behind giving the monetary gift between the British and the Chinese people, was quite different.

For British people, it was usually the lack of time to purchase a non-monetary gift or less

knowledge of the liking of a particular person/couple but for Chinese people, giving a monetary

gift signifies not only good luck but is also is taken as an assistance for the newlywed couple

to build a family.

Another individualistic pattern of British culture which came out from the study was that,

there is less pressure for group conformity in the UK and gifts are given on the basis of

whether personal gain for the receiver can be achieved. In China however, gift giving is an

expression of love and affection. It is seen as an occasion of developing and containing good

personal relationships in the private and the public life which are of high importance, which is a

clear example of the collectivistic behaviour of Chinese culture.

An important finding from the study said, that the Chinese students do face a lot of social pres -

sure to give monetary gifts, and thus people who are into some kind of job, and are earning are

the only ones in both the cultures who give Monetary gifts.

This topic is of growing importance, as international activities and people’s mobility are extens-

ively increasing. Although, by examining the monetary gift giving pattern of Chinese and British

students does not give sufficient insight into the complexity of the monetary gift giving beha-

viour, further exploration of this topic is required. Possible future fields of research would be to

examine differences in the monetary gift giving behaviour considering generational differences.

Furthermore, it is assumed that there are differences in monetary gift giving in a gender context

which would be as well an interesting future field of research.

Marketers can also use the finding from this study about the motivational and the monetary as-

pect of gift giving in Chinese and British Culture, to promote gift vouchers in big cultural fest -

ivals, party gatherings and occasions such as Chinese New year, where a lot of monetary gifts

are exchanged between the Chinese people. Also, the research can come useful to the top man-

agement of the business firms across UK and China to develop much more cordial & strong

business relationships to attain a competitive edge in the foreign land.

14

15

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