Can laowai make 'real' friends?

I recently met an American couple who have been living in Beijing for more than five years. Both love China, its people and culture. Even their children call China home. They would like to have more Chinese friends, but have been frustrated in their efforts.

They told me that they do have a lovely local Chinese couple as friends. But they have only recently been to the couple's home for the first time after having them over to their home on 50-plus occasions.

I started pondering whether non-Chinese could ever make true friends with local Chinese, and why the Chinese couple would behave this way. The first major issue could be "face", or mianzi: they could feel embarrassed that their place is too small or not good enough to have foreign guests around.