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Does “guanxi” Really Help Your Business in China?

In Chinese culture, the word “guanxi” (关系) in Chinese not merely refers to English meaning “relationship” or “connections.” It emphasizes more on having personal trust and a strong relationship with someone; this might involve moral obligations and exchanging favours.

Sometimes people perceive it as corruption in business since it can be understood as an immoral way of quick success. (eg. Employing a friend rather than a more qualified one.) Although people in China indeed take a lot of advantages of doing business because of guanxi; however, it’s not always true since society is changing now, capabilities speak for people.

As the basis of Chinese social interaction, "relationship" originates from Confucian culture. Confucius once said, “All the people of the world are brothers.” Chinese people understand it as a moral act of helping others unconditionally. However, to fulfill moral obligations or maintain “face”(dignity), the recipient subconsciously insists that something should be repaid. Therefore, people regard gift-giving as a way of expressing gratitude, which then develops to reciprocity. Thus, the act of giving and receiving gifts and benefits, as a way of showing respect, friendship and trust, promotes the development of "relationship".

Why do people enjoy having guanxi when they do business? Since doing business usually requires the network of contracts, with guanxi individuals,can call upon when something needs to be done, which is quite efficient and easy. Business people in China are more likely to give trust to those whom they already build a relationship with, in this way helps them to expand the market and promote sales. However, people need to be aware that “There's no such thing as a free lunch” (天下没有免费的午餐), and the reciprocal nature of guanxi is to return the favour.

While building guanxi can be a long-term approach. If you want to build guanxi with Chinese people in business, perhaps the wisest way is to develop conscious and continued effort by daily communication or frequent cooperation. Recent years, the regulations of corruption are getting strict and strict, so giving gifts sometimes might be refused because this could be considered as disrespect or illegal act. You could also find other ways to build guanxi. However, the best key to open the door of a new world is always your capability.

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