What Is the Concept of Guanxi in China?
By definition, the term “Guanxi” etymologically relates to “relationship network.” In Chinese culture, it is a complex system of interpersonal relationships based on trust, reciprocity, and the exchange of services. This concept, inspired by Confucian norms, bridges personal relationships and business interactions. It contrasts with the Western system, where a clear separation between private and professional life is established.
Guanxi involves cultivating interpersonal skills and a social strategy to build long-term partnerships. It resembles a contact list, but only trusted individuals are included. The goal of this approach is to leverage the network for support in various situations.
For companies, building strong relationships is almost as crucial as collaborating with a sourcing office in China. With a well-established Guanxi network among investors, their influence in the local market can grow rapidly.
Why Is This Historical Practice Important in Business Negotiations?
A sense of belonging and trust governs the business world in China. Business relationships are built over time. Once the connection is established, the partner is fully committed, making Guanxi invaluable.
Applying this concept also serves to clarify hierarchical positions, acting as a reminder of order. Developing Guanxi creates the ideal conditions for sourcing purchases or securing exclusivity in a market segment.
This Chinese relational concept goes hand in hand with Mianzi, the art of saving face and preserving dignity. It guides interactions and decisions, ensuring that no party experiences humiliation or loss of social status. It safeguards the honor of stakeholders in a negotiation.
Guanxi and Business: How to Build Your Professional Relationships?
In a complex legal environment, Chinese management encourages a “network-based” approach to overcome decision-making challenges. This “marketing approach” relies on a strong network of connections (family, friends, professional contacts).
Establish an Initial Trust Connection
Merchants looking to enter the Chinese market do not necessarily have to build a Guanxi network from scratch. They may face multiple cultural and situational barriers. The best solution? Join an established circle through sponsorship. A trusted third party can introduce you to the right contacts, find suppliers, and build reliable relationships.
The first connection sets the foundation: it must establish “absolute and mutual trust.” All contacts involved in the network must make reciprocal efforts to foster a stable and beneficial collaboration.
MWT Sourcing facilitates your international expansion strategy. As a sourcing and procurement specialist, we provide guidance and support with personalized and optimized solutions, including relationship management. The goal? To address the logistical challenges and quality standards of the Chinese economy.
Attend Corporate Events
Guanxi develops progressively through participation in professional gatherings: conferences, business dinners, team-building seminars… These events provide opportunities to interact with Chinese investors and apply Mianzi principles. It is essential to respect Chinese social norms and etiquette. This approach helps expand your Guanxi with influential business figures.
Beyond offering a gift, you must pay attention to how you present it to make a good impression and “give face” to your counterpart. When toasting with partners and colleagues, hold your glass slightly lower when speaking with a higher-ranking individual. When expressing an opinion or idea, avoid raising your voice or using excessive hand gestures.
Expand Your Influence on Social Media
Although word-of-mouth remains the traditional method for building a solid Guanxi network, e-reputation has gained significant importance in China. The top Chinese social networks to focus on? Baidu and WeChat. A well-executed SEO campaign enhances your contact network and helps establish trust in the long run.
The latter platform has over one billion active users, with most French brands maintaining an official presence there. Chinese investors also appreciate Zhihu, a Chinese social network similar to Quora.
