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Since non-Chinese have no guanxi networks in China, they are not part of these charmed circles and by definition will find it difficult to build relationships or connections with the Chinese. This same applies to business people entering other Asia markets like Japan, South Korea, or even Malaysia and Indonesia. In many cases, networking is the only way to achieve real business success and therefore has to be approached with commitment and careful study. In order to obtain the key, you have to recognise that the system is built on obligations and favours that play an informal but essential role in Chinese and Asian business.

Chinese Guanxi and Business Ethics

Guanxi building is not to be confused with the banqueting and drinking customs that surround and support it, even though these traditional habits of hospitality are used to build the personal connections that the guanxi system eventually benefits. In many countries in Asia, the personal relationship is vital to the beginning of all serious negotiations.

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It is sometimes difficult to explain to Westerners that Asian business deals are often more based on relationships than on contracts or actual transactions. For the Westerner, a personal relationship may build up over time in an organic way but the important issue is to sign a contract as the first stage towards completing other possible contracts. However, exactly the opposite applies in Asia.

How To Build Business Relationships In China Like A Pro

Only after the process of guanxi or network building has taken its course and strong personal relationships are achieved will the Asian party move on to consider a commercial transaction. In other words, the rulebook about not mixing business with pleasure or the personal has to be thrown out of the window.

The route to a profitable business relationship in China — and in Asia — is usually approached from the opposite direction.

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