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Guanxi Concept in Chinese Mentality

“Guanxi” is the traditional model of social relations in China, based on mutually beneficial cooperation, reciprocity and trust

This term can be roughly translated as “personal connections”, or “social networks”.

Basically, it is the system of social relations, based on mutually beneficial cooperation, reciprocity and trust, both on personal and business levels.  If you are in “Guanxi” relations with somebody, you are supposed to do mutual favors and support each other in case of need, depending on the nature of your relationship.

It is a core trait of Chinese mentality, and it is very important to understand the way it works in order to have a successful business with the people in this country.

Guanxi has its roots in Confucian philosophy, where the individual is seen as a part of the community. It is also closely related to the concept of “Face”, which was the topic of a separate article.

The whole system of social relations in China is based on this idea. In business etiquette it is particularly prominent, and should be definitely taken into account.

Some practical advice:

  • Business dinners are important

Business negotiations rarely take place at a business lunch or dinner, rather it’s a time for developing your business relationships and building some Guanxi. Dinner meetings are commonly used to gently probe each other without any formal commitment.

  • The Chinese traditionally give presents to their partners on business meetings

There are certain rules for this matter, which can help you avoid any misunderstanding, produce good impression on your Chinese counterparts and earn some Guanxi.

The appropriate gifts for such occasion include national souvenirs, items with your company logo, classy alcohol. It is good practice to wrap them in red or gold colors, symbolizing luck and well-being. Social hierarchy is also very important: head of the company and the senior managers should be given presents first.

  • Do not rely on formal agreements

Good “Guanxi” relations are generally more important for the Chinese, than some legal formalities or contract details. Successful business in China depends largely on the Guangxi you forge and who you build this relationship with.

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