Red Packets Gifting in China – Best Practices

Red Packets Gifting in China – Best Practices

Gift-giving etiquette is a crucial aspect of managing employees in China. Local employees anticipate receiving them, so failing to meet these local expectations risks damaging your reputation as an employer and may result in employees leaving to work for more culturally sensitive competitors.

Red packets (also referred to as “red envelopes” or “hong bao” in Chinese) are among the most significant gifts foreign and local companies give their local employees. Even The electronic red packets so common today are a modern adaptation of a long-lasting tradition deeply rooted in Chinese culture.

The evolution of red packets

The custom of giving red packets originates from an old myth about a ghost named Sui, who came on New Year’s Eve to scare children. To protect their terrified children, parents threaded eight coins onto red strings and placed them under the children’s pillows. These coins were believed to symbolize divine guardians. According to the myth, Sui was warded off by these protective symbols and eventually stopped frightening the children altogether.

As generations passed, the tradition evolved. Coins were replaced with banknotes, and the red strings gave way to red envelopes. In contemporary China, red packets are sent digitally via WeChat. This digital transformation has made the custom more interactive and accessible, allowing employers to send good wishes instantly, regardless of their physical location. The digital red packets can be sent with playful animations and personalized messages, adding a modern twist to this ancient tradition.

How do red packets affect your reputation as an employer?

Practicing the tradition of gifting red packets to Chinese employees can significantly influence your reputation in China. Properly and consistently giving red packets demonstrates your understanding and respect of Chinese culture, and could increase your employee loyalty and even attracting top talent. Neglecting this tradition may suggest cultural ignorance and inconsideration, potentially leading to employee turnover. In today’s competitive market, losing local talents due to a lack of cultural awareness can turn into a costly mistake.

However, companies must also be mindful of the legal and ethical implications surrounding gift-giving in China. In recent years, the Chinese government has intensified efforts to combat corruption, scrutinizing practices that were previously tolerated. In this landscape, red packets can sometimes be perceived as means for less “honest” purposes, such as bribery. Therefore, international companies hiring in China should exercise caution in the frequency and value of their gifts. This will allow to maintain the cultural significance of the gesture while avoiding potential misinterpretations.

Overall, it’s noteworthy that gift-giving etiquette extends beyond employee relations. Companies should refrain from offering gifts to government officials at any level and avoid extending meal invitations to them. If they invite you to an event or a meal, be aware that there might be an agenda behind it, perhaps an implicit expectation of business collaboration.

Gifting Red Packets to Chinese Employees – Best Practices

Do’s

• Distribute the red packets to Chinese employees on the last working day before the Chinese New Year holiday.
• Include amounts featuring the lucky number 8.
• Choose even amounts to reflect the Chinese concept of balance and harmony.

Don’ts

• Avoid amounts starting with the number 4 (the word “four” in Chinese is pronounced as the word “death”, making it considered an unlucky number).
• Refrain from gifting red packets on occasions other than holidays, preferably sticking to the Chinese New Year.
• Avoid overly generous amounts so the gift isn’t mistakenly considered a bribe.

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Last updated: Aug 2024