Top Two Differences in China

Tip and Tax are among the top differences between China and most western countries.

Before someone steps out of the door of his/she own country, he/she cannot really understand how different people do the same thing. I try to list top differences for foreign visitors to China. Check if you have known this before you pack your package to China.

  • No tip required. You don’t need to pay tip for any service – in restaurants, hotels, taxi… The salary for hotel or restaurant servers is fixed and there is almost no relationship between their performance and their income. In most of the business, accepting tips are strictly forbidden to “protect the right of consumers”. Personally, I believe tip is a good way to encourage good service.
  • Tax is included in all price. If you see something labeled 300 RMB, you pay 300 RMB. All the tax is included in the listed price. This makes the goods in China even cheaper compared to other places. For large goods, like house or business to business transactions, tax are calculated separately.

20 Comments

  1. Hi JingShuo,

    Thanks those are good things to know!

    I have a few questions on ATMs. Are there a lot of these in SH? Any security issues relating to the usage of ATMs and are there any fees for using ATMs?

    Thanks again for your wonderful blogs.

    JX

  2. Jian Shuo,

    As you mentioned here, there is no tips in China. For example, in hotels in Shanghai, those door men carry the luggage for us to our room, it is ok we don’t give tips, right? My husband is always give tips as he does in US. He gave tips to Taxi drivers and door men at hotel in China. It looks like it is not necessary in China.

  3. No tipping is the remnant of the Bolshevik and is regarded as obsolete in western world.

    Tipping or gratuity is an extra appreciation render to the server, it helps to bring up the quality of service, it may create a two tiers of hospitality, but it also help the server to reach the pinnacle of serving.

    Sales tax in addition to the price is intended to show the transparency of taxation, since people in China has resistant against tax, value added tax may be the best way to collect tax.

    Stephen

  4. FYI.

    Japan was similar to China situation before, but recently they changed to charge tax 5% separately. I think eventually it is good to have the sales tax, as Stephen indicated, make it transparent for the taxation.

    Even in the states, many items are not taxable, basic living goods, for example, fruits, meats and veggies etc.

  5. I think you still supposed to pay tips to the door men in China’s luxury hotel. Exception should be made there.

  6. Generally speaking in Japan you do not tip servers in restaurants either, even in luxury ones although you might be automatically charged a service fee. So I would not see no-tipping as Bolshevik or obsolete, more of a tradition thing to me.

    And yes, there are exceptions. I once saw people tipping “red hats” at PVG(those who helps you to carry heavy luggages). Maybe the exceptions can be expected only where there are more foreigners. Some restaurants in China also charge mandatory service fee, e.g. the famouse “Quan Ju De” at He Ping Men in Beijing, with service not necessarily worthing the money.

  7. Paying gratuity to the person who serve you is a matter of courtesy while the right of the consumer is not exploited as it is totally voluntary.

    I cannot see why authority would want to cap the extra remuneration coming towards the hard working hospitality staff, while the bureaucrat can receive extra bonus for their hard work. Double standard?

    Stephen

  8. I assume your question is not for those non-authority who read the blog :)

  9. In the U.S. it has become “mandatory” that you give a tip at restaurants, regardless of the quality of the service. You might vary the amount of the tip, but you always leave something. At this point, the “tip” has become a “tax”, and the server does not do anything special to merit the tip. There is no difference between a “no tipping” and an “always tip” policy: neither encourages the server to perform a better job.

    However, if the service is truly terrible, you should leave one penny as the tip, to show your opinion. If you leave no tip, the server might simply conclude that you forgot to leave a tip.

  10. Although the origin of tipping may come from the extra satisfaction brought by the service, it has been a general understanding in western world that the tip is a part (sometime a significant part) of the income the service providers depend on. So tipping may not be necessarily a way of showing only appreciation. In some cases it is not entirely voluntary. For example in US, the room service charge by most hotels automatically includes the tips. Many restaurants add tips to the bill whenever they serve a table with more than 8 people.

    Some up-scale hotels and restaurants in China learnt very quickly that the tips could be an extra income for the companies, but not the individuals who provided the service directly. So the tip there is indeed a part of the price for the service.

  11. As far as I know, most European countries don’t require tip (but it’s neither forbidden nor considered as bad) and tax is included in all prices as well. The “western world” is not restricted to the American continent…

  12. Agreed with Damien B.

    Being as “expat” in Europe for 7 years, I have never encountered scenario of tipping in all European countries I travelled.

    I was shocked the first time in NYc when the cab driver did not give me back the changes: “it is the tip”.

    Anyway, that’s America, there are lots of uinque things, like they still use “gallon” rather than liter in gas station, and I don’t see “kg” in supermarket as weight unit……

  13. Yes, US is a bit behind…

    15% tip is not usual for an european guy to be faced with in the restaurants at first visit.

    They will stop you at the exit if you forget, even the service has been lousy.

    Tipping in Europe is not required at any place, but of course appreciated, if a good service is provided.

    Tipping in Asia outside China is same as in Europe.

    Tipping in a bar/restaurant/shop in China can have the effect, that the tip is confiscated by the owner, if they see the exchange of money. They treat the staff terribly in general.

    In the better hotels a 10% service fee is charged, although noone of the staff receives extra. Here is a good place to tip, if you want prolonged excellent service from the bellboys, etc. usually 5 RMB (or 10 RMB if it is VERY good) is appropriate for rich guys like those who can afford to stay at these hotels. (And they tell the good news to the other bellboys, of course.)

    Do not tip the taxidrivers exept the service and driving has been supreme, and that seldom happens in Shanghai. Usually they will give you all money back down to the last kuai.

    Bring some jiao and kuai in your pocket for the beggars and the very poor, when you go around in Shanghai. Give 3-5 jiao or 1 kuai according to your feelings.

    Be prepared for the worst scenery of grandmothers (in rather nice clothes) dragging their 2-5 year old grandchild around by the arm to beg from you. Mostly in the streets after darkfall, and even in the subway… Don’t give this child, as you support the continuing if this behaviour.

    Frankly, I think that we shall tell them to join and go to the government to ask for some money. Then they do not have to beg !

    Money for the poor are better spent than for a new highway or a Maglev train.

    So, all in all about tipping in China – a greedy one can save money here, but spend a few kuai in the right places and in the right way, and you will be rewarded !

  14. The US is the one country very big in tipping.

    Is it mandatory? People say it is not, but….

    Is it a matter of courtesy? Some say not really (meaning: I tip because everyone does).

    It is an American tradition, that’s what it is.

    And I suspect that it had started from bribing, maybe.

  15. About ATM card in ShangHai, I was there in September, there were no problems for me to use my Bank of America ATM card from US. However, while I was in BeiJing, only Bank of China’s ATM machine processed my withdrawl. Other banks’ ATM were not able to honor my request for withdrawl.

  16. As foreigner traveling in China, you will often give the taxi drivers a big “tip”, even though you won’t know it.

    Outside of the large cities, the taxis do not have meters. You negotiate the price before you start the trip. As a foreigner, you have little idea how much to pay, so you will always end up paying far more than a local person would. Even if you think you’ve made a good bargain, you are still paying extra.

    The taxi drivers also get a “commission” from hotels when they bring a tourist to the hotel. Some drivers are very aggressive about taking you to a hotel that pays them, instead of the hotel you ask for. In Hangzhou I had a taxi take me to the wrong hotel. I then showed him the key to the room in the hotel I was already staying at. (I had my pack with me, so he assumed I had just arrived.)

  17. I do have a big problem with manditory tipping in the US. Generally with a table of 6 to 8 or more they will add a manditory gratuity. In most cases service become terrible.

    I’ve learned not to tip in China, but it is very hard for me as service is usually excellent. I feel guilty.

    It seems that some people in china target the westerners for request tips.

  18. Here in Shanghai, I only tip at bars that have a mix of expats and Chinese. And only if I am planning on returning or if it is crowded. This ensures that I get excellent service that evening or whenever I return. The staff don’t expect it from many, but truly do appreciate it when they receive it. And it is generally only 10%, as opposed to a minimum of 15% or $1.00 per drink at a bar in the US.

  19. Is there any official agency for looking after the poor and homeless in China? Do people living ont eh streeet have support for their basic needs like water and food?

    When I was in SH in October, I saw some old people picking plastic bottles and collect them for exchange at recycling station, I was saddened by the sight as some of them reminded me of my own grandparents.

    At times I saw they beg for people not to give them their (empty) drinking bottle), yet the youth sometimes just throws the bottle into a river or a dump delibrately! I felt pretty angrey about this.

    As a general rule, I only give money to the eldly beggers as they are tend to be most vulnerable, and instead of money, I always bag the left over (clean food) from a restaurant if I can’t finish it, and give them to the homeless.

  20. THE MAJOR DIFFERENCE BETWEEN AMERICA AND CHINA

    The major difference between America and China is in essence the major difference between the Americans and the Chinese people. This difference lies in the culture of individualism vs collectivism. The other differences such as tipping, etc. are not differences or are unimportant differences. Some Americans are also very cheap and they don’t tip or tip very miserably. The Americans look down upon the Chinese for spitting; at the same time, the Chinese parents penalize their kids for “finger lickin good” which is rather popular among the Americans consumers.

    This major difference of cultural mentality or ISM surfaces most vividly in the decision making of individuals’. Most Americans have been trained to think independently whereas most Chinese have been regimented or trained to take orders. Independent decision making is essential to the functioning of democracy. Perhaps this is why democracy and regimented upbringing are not compatible with each other.

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