Guanxi – doing business in China 2008

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guanxi

“Guanxi” (pronounced (gwan-shee) is one of the most powerful forces in Chinese culture. Though the direct translation of “guanxi” is “relationships”, the concept as it is used and applied in Chinese culture is much richer and encompassing. “Guanxi” does express the relationship of one person to another, or one party to another. However, more importantly the term also expresses an obligation of one party to another, built over time by the reciprocation of social exchanges and favours. If one has “guanxi” with another, one will be quick to do a favour, act on another’s behalf and depending on the depth of the relationship, do anything necessary for the other party. By establishing this type of relationship with someone, the other party is implicitly agreeing also to be available to reciprocate when the need arises. In such a way “guanxi” can be considered as a type of currency that can be saved and spent between the two parties. Like money, it is a resource that can also be also be exhausted, so one must be sensitive not to overextend the “guanxi” that has been established.

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