From your description, you were very kind to the Chinese lady...I had some similar experience with an Indian employee who is smart but didn't treat his work seriously because I was too nice to him. The consequence was that his projects were full of small mistakes here and there because he definitely didn't have his undivided attention to work on my projects....
My lesson to learn: Keep a proper distance from your employees and draw a clear boundary to what you like and what you don’t like. Being professional is way more important than being kind. Being kind might work to few self-motivated employees but a lot of time it doesn't work well. When you are a lead/manager, sometimes, you need to say no to draw a clear boundary....Apparently, the Chinese lady got some wrong idea by giving you a gift card and you accepted it, etc....
Good luck!
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