Networking in China: Beware of "Great Guanxi"

- Carson Block, China Primer

It always tickles me when I hear relative newcomers to China exclaim that they are using somebody who has “great guanxi” to help them with their business (“guanxi” means connections or relationships). The great guanxi person is frequently a joint venture partner, consultant, or even a supposed friend.

If you are a relative newcomer to business in China, the overwhelming odds are that you do not know anybody who has truly great guanxi. However, because you are new to the scene, it is easy for people (especially if they are Chinese) to create the misperception that they are able to work magic through relationships.

One reason they can be convincing to the untrained ear is that China is massive, and probably holds the record (or is a close second to India) for the number of government officials. Almost everybody you will meet has a friend or relative somewhere in the government. Moreover, Chinese bureaucracy is highly compartmentalized. Even if you do curry favor with someone in a given government department, they may be able to provide only a small amount of assistance because much of the matter is also processed by other agencies. The bottom line is that few people can actually access the truly powerful people within government or large companies.

Another reason that Westerners easily fall for the “great guanxi” line is that we all want to believe in the myth. Our lives would be so much easier if we found a person who could eliminate every disadvantage we have as a result of being foreigners doing business in China. Plus, we of course like to think that we are special, and such movers and shakers would of course gravitate toward us. Unfortunately, unless you are the CEO of a Fortune 100 company, that will not happen – at least at first.

You should not automatically write people off because they are unlikely to have the relationships they claim to have. When it comes down to it, they probably know somebody who could be helpful at some point. Just do not invest more than some casual meals and drinks in such people – at least until you believe you have a better understanding of the environment in China. At that point, you can better judge whether you are lucky enough to have come into the orbit of a real power broker.

For more information on the importance of relationships to the Chinese and tips on how to make connections with Chinese business people and government officials, see Doing Business in China for Dummies, Chapter 15 (Fostering Fruitful Friendships: The Art of Guan Xi).

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