The mystery of “guanxi” or 关系 in Chinese business

Guanxi (/gwanˈCHē/ or 关系) is a Chinese term that can describe many things, but in society it mostly points to “networking” or “relationships.” Perhaps in American terms, it could be summed up — at least in business terms — with the old adage “It’s not what you know; it’s who you know.” Let’s there are a few more critical nuances that make guanxi different from American networking. Continue reading below.

If you want to practice your guanxi building skills, check out our young professionals networking gathering on the evening of Wednesday, April 23. Click here to register for free or check out the event page on Facebook.

According to the Chinese sociologist Fei Xiaotong, guanxi is built gradually from personal connections to create an overall societal web. It is a term that is classified into many categories and is important for almost all sectors of life in Chinese culture.

In the West, the idea of social networks and their importance in life exists, but it has a much deeper meaning as one navigates through Chinese society.

The Business Insider makes a critical point about the difference between relationships in the West and guanxi in China. The fundamental factor is the existence — or apparent lack — of the rule of law.

Guanxi’s importance in China has developed as a result of the cultural implications of the rule of law and the concept of face. For millennia, China has lacked a strong rule of law. Because the law has not often been able to provide the legal protections which it does in the west, Chinese people needed to develop another means of ensuring trust amongst themselves in personal and business matters. Maintaining face, or reputation, among people within one’s own network is also an important characteristic of Chinese culture. Because of the importance of maintaining face, Chinese people will usually not take advantage of a person with whom they have guanxi. This is true because if they develop guanxi with them and they were to take advantage of them, all of the people in their network would know what they had done and they would lose face with this network. By losing face they would also lose the respect of others in the group and potentially lose their connection with their network. Therefore guanxi has become a means of building trust that law cannot always provide for Chinese people in personal and business matters.

Guanxi takes time to build and requires constant maintenance, which is the reason that many American businesses tend to run into difficulties in finding partners in China that they say they feel they can trust; the American business man or woman might not take the time and effort necessary to build a proper level of guanxi before they enter into business dealings. The Chinese have a saying that puts the idea in perspective:

先做朋友,后做生意

Or, “First become friends, afterwards do business.”

Business in America can be direct and unceremonious. While in China, business is quite the polar extreme. Keep that in mind the next time you start working with Chinese counterparts. They will respect the effort and will repay it in kind. You might also find yourself making a friend and perhaps even a best friend forever.

 

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