August 21 2012

“关系”Guanxi - Do we really know the roots meaning of this word

“关系” “Guanxi"  literally means "relationships",  and is usually use in the Chinese business world. It is also understood as the network of relationships among various parties that cooperate together and support one another.
The Chinese businessmen mentality believe in exchanging favors, which are expected to be done regularly and voluntarily, if one is to function effectively in Chinese society.

In China it is the right "Guanxi" that makes all the difference in ensuring that business will be successful. By getting the right "Guanxi", the organization minimizes the risks, frustrations, and disappointments when doing business in China. Often it is acquiring the right "Guanxi" with the relevant authorities that will determine the competitive standing of an organization in the long run in China. And moreover, the inevitable risks, barriers, and set-ups you’ll encounter in China will be minimized when you have the right “Guanxi” network working for you. That is why the correct "Guanxi" is so vital to any successful business strategy in China.

How relationship is established in China
Although developing and nurturing the "Guanxi" in China is very demanding on time and resources, the time and money necessary to establish a strong network is well worth the investment. What your business could get in return from the favors for your partners are often more much more valuable, especially in the long run, and when you’re in need. Even domestic businesses in China establish wide networks with their suppliers, retailers, banks, and local government officials. It is very common for individuals of an organization to visit the residence of their acquaintances from other organizations, bringing gifts (such as wine, cigarettes, etc.). 

The wrong education on "Guanxi"
And yet educations, businesses, governments advocate their staffs, counterparts, students to pay close attention to the importance of Chinese network or  "Guanxi", thinking that it can indirectly link them to new acquaintances and information resources, thus helping them to develop other right "Guanxi" they need. Not knowing that it actually poison wrong value on their minds. Many of  the young professionals have invariably and unconciously drunk in the evils of the roots of "Guanxi" into their character, i.e. corruption

"Guanxi" or relationship with high rank officials are still important for doing business in China, though declining to some extent. 

Roots of "Guanxi"
Though it is completely legal in their culture and not regarded as bribery in any way.  The roots of "Guanxi" actually stem from corruption. It is disguised as network relationship building, goodwill, information gathering etc but honestly it all boils down to humans' basic needs of wanting to fill the stomach first (as China came out poverty very fast) and then meeting the higher needs like flashy cars, big houses, branded goods, exotic holidays, exquisite cuisine, luxury hotels, first class travels etc that cause men to crave for more wealth through corruptions and grafts.
Therefore this kind of "Guanxi" is always very one-sided. When "Guanxi" is involved, there is a risk of obtaining an invoice of twice the amount that you bargained for.