Achieving Guanxi: 5 Tips to Help You Succeed in Chinese Business
Anyone who does business in China will come across the word “Guanxi” ［关系／關係］ sooner than later. Guanxi is one of those words in Chinese that can only be explained conceptually — it does not translate directly to the English language. It essentially refers to the interpersonal networks of people one builds that helps them succeed in business. There is a saying in Chinese: duō yīgè péngyǒu, duō yītiáo lù; this means ‘to have one more friend, to have one more way’.
Read more for a brief cultural explanation and five tips on how to achieve the elusive Guanxi.
Guanxi is such a deeply-rooted concept that foreigners often make serious cultural missteps when trying to achieve the network that Chinese nationals are essentially born into. Don’t let this get you down though. By understanding that Guanxi is fundamentally built upon three important traits — dependability, trustworthiness, and respect — and applying this to your business relationships you can build strong relationships that will open the door to networks of people that will immensely help the growth of your business.
Here are some tips that you should take to heart when doing business in China:
#1: Pay attention to favours and respond appropriately
Favours are a deeply ingrained aspect of corporate culture in China and can be key to setting you on the path to obtaining the elusive guanxi. It is important to stay alert when a Chinese person does you a favour, as failing to reciprocate will be frowned upon. This doesn’t mean that you must go head over heels returning a favour, but respond proportionally. Say someone takes you out for the evening on their dime — invite them over for dinner or take them to a show. That being said, you have to pay attention to these favours when they occur. They are oftentimes subtle and can be easily missed. You won’t hear a Chinese person announce, “This favour is an attempt to build Guanxi with you”… so pay attention!
#2: It isn’t just smoke and mirrors
A report done by MIT on the art of building effective business relationships in China highlights a global automotive company that had serious problems with integrating into the Chinese market as a result of overdoing it. This company thought that in order “to make the right connections, [they] sponsored events and lavish dinner parties”1 in their efforts to attain guanxi. This plan backfired against them because their partners and clients became to view them as “a seeker of short-term transactional opportunities wrapped in expensive entertainment.”1 It also made them seem less focused on business and more focused on pleasure. This example illustrates what guanxi is not built upon: expensive gifts and displays of wealth. Doing so is a gilded gesture — it does not prove trust or dependability, it only shows that you like to have a good time.
#3: Think of business relationships like family, metaphorically speaking
Family is a key aspect to the Chinese society and as you learned above, integral to the Guanxi ‘network’. Being a foreigner, you obviously will not have this as an available connection. However, you will benefit from applying the principles of familial relationships in Chinese society to your business relationships. Family relationships are built upon respect and hierarchy and you think of your business relationships as the same. When dealing with a senior executive or someone older than you, you are seen as “under them”. This doesn’t mean they won’t do business with you. It just means that you must treat them with exceptional respect to their seniority. Consider these three of the five Confucian essential relationships: father-son, husband-wife, and elder brother-younger-brother. Yes, the second relationship is utterly sexist, which is a bit repulsive. However this hierarchal format of relationships explains how Chinese consider relationships and can be considered analogous to your business relations.
#4: Simple surprises go a long way
One easy way to gain a Chinese person’s trust is through a simple, thoughtful gesture. For example, say the manager of a company you work closely with is going on a weeklong vacation. You know that he has a prized poodle and he also happens to be single… offer to watch his dog out of the blue. While he may decline, the fact that you offered to him demonstrates a level of respect that he will not forget. Taking this conceptually: look for opportunities where you can jump in and provide a helping hand. Chinese people will remember this and it will sway their affective trust in your favour.
#5: Stick to your promises
This is pretty much common sense in any business relationship, but a sure-fire way of never achieving good guanxi with your business partners is by being undependable. If you have a set a date or made a promise, it is absolutely vital that you stick to it. Good guanxi consists of a lot of unspoken agreements, a product of the pervasive trust that comes with guanxi. If you don’t gain the trust of your business partners, you are pretty much screwed.
Of course this isn’t the end-all, be-all list of how to achieve Guanxi… their have been dissertations written about this cultural understanding. I would suggest giving the following articles a read for even more information on this important aspect of business relations.
Constance’s Vocabulary Picks
Nothing matters if you have a connection, everything matters if you have no connection:
P：Yǒu guānxi jiù méiguānxi, Méiguānxi jiù yǒu guānxi
To have one more friend, to have one more way:
P：Duō yīge péngyǒu, duō yītiáo lù |
1: Doing Business in China from a Legal Perspective
2: Why Competence Alone Won’t Cut It in China
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