Chinese culture values modesty (谦虚 qiānxū). When complimented, saying 不敢当 shows humility. This is expected and appreciated, especially with elders or superiors.
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Similar humble responses include 哪里哪里 (nǎlǐ nǎlǐ, 'where, where' — meaning 'not at all') and 过奖了 (guòjiǎng le, 'you overpraise me').
