Author: Nadine Clauder
Guanxi is a system of networks and relationships in business and private life in China. Furthermore it´s a door-opener and confirms commitment. Guanxi is all about giving and taking. It is essential for being successful in the People´s Republic of China.
Due to the lack of strong legal institutions, the ‘Chinese way of schmoozing’ is based on the traditional values of loyalty, accountability and obligation. These give the people an orientation while interacting with each other. It is a personalized network of influence.
Guanxi is divided into three types:
• Family
• Helper
• Business
Depending on the type there are different elements of Guanxi:
• Jiaoqing: Social Guanxi quality
• Ganqing: Blood Guanxi quality (degree of closeness of partners)
• Mianzi / Lien: Giving and losing face (reputation / integrity)
• Renqing: Physical and / or non-physical favours
• Xinyong: Trust
The Chinese prefer to do business with people they already know and trust. Trust is one central column of the very complex structure of Guanxi and indispensable to multinational companies in China. For international business partners dealing with China, some of the advantages of Guanxi are business relationship development, building up personal and company reputation, support with government policies as well as enlarging their market share. On the other hand, bribery and corruption related to Guanxi have to be faced.
Guanxi needs time, effort and cultural awareness — but is absolutely worth it for business and private life!
Got Guanxi? What is your experience with Guanxi?