The prevailing mentality is that: a) everyone does it, so why wouldn't I do it too? Even if you cheat me (or I cheat you), there's still money to be made, so why are you so upset? b) China is so big, if you screw over one partner permanently, there are hundreds more where they came from.

> Don’t they also have a system of personal relationships , are those also built to tolerate cheating ?

Let's say you invest in my company, and I hire your son for a job. That relationship isn't going to stop me from embezzling money from the company accounts. So yes, there is a precarious system of IOUs, favours and horse-trading. But I wouldn't say it "tolerates" cheating. It just changes where and how it occurs.

Again, I should reiterate that this isn't every Chinese company. Legitimately honest, trustworthy Chinese businesses do exit.

But pick one at random, and it's far more likely to be a dishonest one.