As a learner of Mandarin myself, one question that fellow Mandarin users often have is in marking the difference between 2 words that Chinese people use to describe foreign people: laowai (老外) and waiguoren (外国人).
Due to China’s history of isolationism, many Chinese people still see people in black or white terms: either they are “Chinese” or “not Chinese”. They don’t particularly differentiate, say, an American from a French person. Both of them are waiguoren, both of them are laowai. But the two words do actually conjure up slightly different nuances of meaning.
Many foreigners who have not had much experience of Mandarin think laowai is a perjorative term, since it literally means “old outsider” (whereas waiguoren simply means “foreign country person”). However, in Chinese, lao is actually used as an honorific to describe people that you have known a long time and know well enough to refer to them in such a way. This isn’t to say that laowai cannot be used as an insult, however – like so many things in Chinese (and languages in general), it depends entirely on context.
This reply to the very same question on quora.com, a crowd-sourced Q&A website, has more information:
Whether or not laowai 老外 is pejorative depends on context.
Many Chinese will argue that it’s not pejorative at all. Lao 老, after all, is an honorific denoting seniority and informality, such as when used with a surname: Lao Liu 老刘, “Old Liu”. Laowai is often used in a similar way to demonstrate informality, with the feeling that terms like waiguoren are too formal and stuffy. In certain circumstances, however, this informality can be interpreted as showing a lack of appropriate respect. If one were to refer to Hu Jintao, President of China, as Lao Hu, this would normally be interpreted as a lack of respect. In the same way, laowai can be interpreted as slightly disrespectful rather than as a term of endearment.
In some uses, laowai is clearly pejorative, for instance when used as an adjective. “You are too laowai” 你太老外了 literally means “You are too foreign”, but in fact carries the meaning “You are ignorant”.
Perhaps the best measure of whether a word is pejorative or not is to gauge what the subject himself/herself perceives. In my experience, most foreigners do not like being referred to as laowai except in the most informal of surroundings and by close friends who may use the term in a joking manner, similar to the way one might refer to a close Caucasian friend as a “honky” without causing offense.
Personally, I never use laowai to refer to myself or other foreigners.
There is nothing negative about the word itself; it’s all about how the word is used. In this sense it’s similar to “Chinaman”. There is nothing inherently pejorative about this term; it simply denotes “a man from China”. However, through widespread misuse this term became recognized as being racist. Laowai is nowhere near “Chinaman” in terms of negative connotation, but through misuse has also gained a certain pejorative sense.
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