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This study investigates politeness phenomena in Chinese service encounters, contrasting the use of facework in two types of service encounters: state-run vs. privately-owned stores. I argue that politeness is a dynamic process, which involves participants’ perception of a social setting and the assumed interpersonal relationship in a given situation. It is shown that social distance and the type of social relationship play an essential role in Chinese politeness behavior and that the use of facework in service encounters signals a change in discursive practice due to social and economic changes in China.