I read the Chrysanthemum and the Sword, and one part of Japanology (and I know Ruth Benedict is outdated and discredited) that interests me is the argument that societies go through a phase where human feelings and human relationships contradict the formal order. In most Western societies, the end-point is a tipping of the scale towards the formal order, i.e, Law. In Japan, the scale used to be tipped towards human feelings, and for that matter, giri, but what was attempted during Meiji was to categorically tip the scale towards the social structure.
IMO, having read Confucius and Mencius' arguments in favor of human feelings (Ren), I think a Ren-based society is more "rational" than its Western counterparts based on an abstract Law. After all, Law derives from abstractions (social contract) that resemble Plato's notion of a Noble Lie. When held close up to critical reasoning and/or nihilism, they catch fire and are reduced to ashes.
However, the other part of a Noble Lie is that despite being false, it creates utilitarian outcomes better than the truth. China, in a way, must be commended for holding up Ren over Fa (the Chinese term for Law) just as a child must be commended for telling the truth over a lie. Nonetheless, the social outcomes (vast degrees of corruption) must be coralled, requiring that more favor be given to Fa than Ren.
The traditional way of doing things, that is, to handle matters in private and to treat the Law as a last resort, is admirable, especially when you consider the overlitigous Americans. Yet there must be a better balance; to order society through a tradition of justice, without falling into the extremes of either Japanese (hypocritical, and thus functional) adherence to traditions, or American reliance on a human and imperfect legal system. China has not achieved this. My hopes rest that she may.
I believe what you are describing are really differences in the moral framework between Chinese, Japanese, and Western cultures.
First, I think we can all agree that Laws must be based upon social norms, which is in turn shaped by a culture's moral framework.
For example, less than 50 years ago, homosexuality was considered immoral and outlawed in Western culture. Today, that moral view has changed, and thus not only homosexuality no longer illegal, many states are allowing same-sex marriage.
Second, I would posit that differences in moral frameworks are very difficult to understand unless a person frequently changed cultural environments.
As human beings, we are hard-wired to see behavior that does not agree with our moral framework as unethical, and we tend to adopt the moral framework of the society we live in. What we often term as "culture-clash" is really a clash of morals.
Take for example the issue of very young children urinating and defecating in public. Although the issue itself is cultural, people who dislike this kind of behavior make moral judgements on the parents. In their moral framework, it is immoral for anyone, even little kids, to urinate or defecate in public.
Some might argue that there is a utilitarian reason behind this, namely hygiene. However, if we examine this logically, we can see that this argument is entirely nonsensical and hypocritical. The same people who protest loudly at a little kid peeing in a corner wouldn't bat an eye at a dog peeing on a lamp post. Yes, theoretically, dog owners are supposed to pick up after their pets, but many don't, and dog poo is a frequent sight on the sidewalks of Western cities.
This is just one example of differences in moral perception. There are many others I can think of.
On a broader level, the Western legal system is based on a combination of Judeo-Christian values and Western philosophy (Plato, Descartes, Kant, etc.).
The modern Chinese legal system is modeled on the Western legal system, but the cultural and moral values of the Chinese people are based on Confucianism, Legalism, and Taoism. While both Chinese and Western philosophies do share many similiarities (since we are all human beings), it is the differences that cause problems.
