The Chinese tend not to speak in a negative manner for fear of causing a sense of disharmony. Disharmony places strains on relationships but harmony is the moral fiber of any interaction of friendship or business in Chinese society.
There is a Chinese saying: Hai ren zhi xin bu ke you, fang ren zhi xin bu ke wu. Essentially meaning, “Do not bring harm to others but protect yourself from others". When interacting with the Chinese in general they may have a tendency to speak complementary, especially in the initial period establishing a rapport. This comes from what they are taught by their culture and traditions. Confucianism taught respect and honor and the avoidance of negativity and candidness.
Some may even feel that, by their own standards, the way the Chinese “compliment" them seems almost without cause. This is the culture of the Chinese attempting to establish a sense of harmony. The Chinese strive to maintain harmony in most any situation and avoid people who cause disharmony.
Disharmony, in China, may be caused by something seemingly insignificant to someone in the West where the overall view of candidness and straightforwardness is much different. What may be considered as constructive criticism in the West, in China may be viewed as a challenge directed at the status quo or authority.
The Chinese, for the most part, are not culturally prepared to deal with, what we may consider constructive criticism and it may become a point of confusion for them making it difficult to understand the motives behind what has been expressed, therefore considered as a “stab" or causing the loss of face.
When communicating with the Chinese it is wise to be attentive to words used and how ideas are expressed; especially if you are speaking through a translator or to someone who is not well versed in Western culture. No matter how sincere you may be, if misunderstood it may be viewed as negative or destructive. Once there is a feeling that you mean them harm or you don't fit their ideal, then they may alienate or work against you seeing you as an “enemy".
The political waves in Chinese history have a great deal to do with how the Chinese perceive interactions with others and what lines to draw in order to maintain a “safe boundary" within the relationship. The Cultural Revolution (1966-1976) conditioned the masses not to trust anyone and to be suspicious of anything that does not fit within what they were told was correct. People who experienced this unstable period may be more cynical and suspicious than generations that were not directly affected by it.
During interaction with the Chinese, be it on a business or a personal level; be sensitive to the reactions you perceive. If you have suggestions for the other party be sure that you offer them in small doses until you feel comfortable in their ability to accept and digest what you are suggesting, not to mention the importance that they clearly understand the point that you are making. It's best to use simple concepts and ideas to communicate clearly.
The Chinese adore compliments, they love to be complimented just as much as they love to compliment others. Avoid complimenting people on individual characteristics such as hair, eyes, overall looks or appeal; this may be regarded as negative or simply meaningless. Offering general compliments for achievements will help to establish harmony in relations. The best compliments may take into consideration their country and/or company, and group achievements.