On the other hand, as the title of the WeChat essay indicates, the province with the highest GDP also gives the smallest hongbao in China. In response to the essay, Guangdong natives matter-of-factly informed the rest of us that it’s simply the cultural practice in their region to give small, token hongbao, but give them to a lot of people: 5 or 10 RMB among acquaintances, 20 RMB among close friends or relatives, and a maximum of around 100 RMB from the closest relatives. The money is referred to as 利是 (lìshì, or lai si in Cantonese) and is given not only to relatives who’ve net yet entered the workforce, the elderly, or close friends as in other parts of China, but pretty much anyone you know who is unmarried. Happily, rather than be disparaged for their perceived stinginess, these Guangzhou residents received positive comments from netizens in other provinces regarding their strong regional identity and lack of pollution by the materialism of the rest of the country.
Netizens from Dongbei also tried to justify their hongbao amounts on cultural grounds—by owning their reputation as a hale and hearty people who like to do everything, but especially the Spring Festival, enthusiastically. Additionally, the self-reports of netizens indicated variation within each region, and some were not expected to give as large a hongbao as typical of their region due to young age or lack of seniority in the family or because they’ve just joined the workforce. Conversely, they have to give more than normal if they’ve come into good fortune, such as an impending marriage or birth of a child. The value of hongbao also varies according to your relationship with the person and their immediate family members in the context of the whole clan (for example, an older brother might give a larger hongbao to a younger brother’s children than vice versa), whether you see the relative every Spring Festival or just now and then, and if they’ve achieved some milestone event such as starting university.
Though there’s no direct correlation between a region’s economic conditions and hongbao, it might be fairer to hypothesize based on these reports that economic conditions personal, familial, and regional are some of the forces determining the general amount of hongbao given, but may be influenced by less rational factors like cultural prescription, emotional distance, and status.
2. Taxing corporate hongbao is a huge headache—yes, this is taxed
Hongbao exchanged between individuals—received from your grandparents, or given to your second cousin’s spouse’s niece who just happened to be visiting and would feel left out—is not taxed. However, if a corporation gives out hongbao, it’s taxed at 20 percent. Non-cash gifts get to bypass the tax requirements, so many employees end up bearing home gift certificates or boxes of food, condiments, and cooking oil as their Spring Festival bonus from the company.
However, the advent of electronic hongbao opens another can of worms. In 2015, China amended its tax policies to clearly state that e-hongbao sent from a corporation to an individual should also be taxed. An example cited by the law is the practice of TV stations giving out hongbao in the course of their Spring Festival galas to viewers over WeChat as a promotional tactic; according to the new law, the taxed amount should be taken out of the amount given out to the winner, similar with lottery earnings. This law is, needless to say, controversial and very hard to enforce, complicated especially by the practice of some corporations to give out hongbao their followers on their WeChat accounts in negligible amounts that are not worth the cost of actually collecting the tax.
3. Hongbao-speak in the stock market
In Chinese, the term “hongbao market” (红包行情) refers to a surge—usually more than 10 percent—in stock prices that takes place close to the Spring Festival, as if giving stockholders a big hongbao. This is explained by people traditionally wanting to keep hold their money (and by extension other assets) during the New Year. Stockholders, likewise, are averse to selling. During the Spring Festival of 2016, the first after China’s stock market bubble burst in the summer of 2015, stockholders and analysts nervously watched to see whether tradition or panic would rule the day. In the end, to great fanfare, there was a 10.5 percent surge for the two weeks before and after the Spring Festival. Analysts still cautioned people not to celebrate too early: just as the panic before the Spring Festival is not entirely based on rational decision-making, the hongbao market is also a product of culture and emotion, thus not an indicator for the overall recovery of the stock market.
