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Importance of Guanxi

Three guards on a break at the Forbidden City in Beijing

It is important for UK business people to understand the concept of  ‘关系’, or Guanxi (pronounced gwan-she).

Guanxi is a central concept in Chinese society, meaning the importance of personal relationships and trust.

This Guanxi network operates in everyday life as well as in business. In the UK, we would describe it as a kind of ‘you scratch my back and I’ll scratch yours’ arrangement. Having Guanxi at the right place and right level can provide information and useful opportunities for business.

One Chinese proverb is: ‘Make friends first, do business next’. Chinese people do like to establish personal trust and regard before deciding to do business. By getting the right Guanxi, the organisation minimises the risks, frustrations and disappointments when doing business in China.

The Chinese are amongst the toughest negotiators in the world; the skill of bargaining comes naturally to them. The virtues of confucianism such as respect for hierarchical relationships, preservation of face and group harmony affect the way negotiation is done in China. The Chinese are more focussed on means than ends and on process rather than goals.

Listen to Bridget giving an interview on the importance of Guanxi – Click Here