Inside Chinese Business - What Is Guanxi?

INSIDE CHINESE BUSINESS

In this report a summary is given from the book Inside Chinese Business, a guide for managers worldwide by Ming-Jer Chen from chapter 3 until 7. A list of sources will be given to work out the final report on how to do business in China and what elements play a vital role.

Chapter 3

Networking and Guanxi

What is Guanxi?

Guanxi consist of connections that are defined by reciprocity and mutual obligations that and are supported by a sense of goodwill and personal affection.

What makes Guanxi different from informal western networking is its heavy emphasis on family ties and shared experiences.

Guanxi is th strongest in immediate and extended family members & can also occur and form amongst individuals who have a deep and meaningful experience. They dedicate time, energy to establish a respectful relationship that truly defines Guanxi. A huge advantage of Guanxi networking is that it offers protection from threaths and uncertainty.

Types of Guanxi

Chinese see relationships as existing on one of three levels:

1. Jiaren : describes the closest possible relationships in the Chinese context. These are immediate family members followed by extended family members. Very close friends are also considered as family and do not have to be Chinese to be an insider.

2. Shuren: Describes non family members with whom one shares a significant connection , such as former class mates

3. Shengren: describes the relationship with strangers. They are looked upon with suspicion until they are known better. It is still possible to do business with the Chinese if one falls in this level, however on a short-term basis.

Renqing

This term is used to refer to favors that are expected to be returned.

Relationships often result in favors that are expected to be returned, but by no specific date. Sometimes indebtedness from such favors lasts for generations, and the Chinese will remember for a long time a favor that was given to them when it especially was needed. When a favor is returned, it often is in greater measure. This swinging of the balance strengthens the guanxi relationship and carries it into the future.

Even if you are an outsider in a guanxi network you still are an insider in your own network. Rather than focusing on accessing another network, guanxi is more about cultivating your own network.

Overseas Chinese often can serve as a bridge for Westerners to access companies in China. If you are traveling to China, such as third