The importance of Chinese culture in a globalized world has made it more urgent than ever to build relationships. It is no secret that China’s political and economic clout is growing by the day. The rising power is increasingly displacing the US as the number one trade partner to numerous countries and is the greatest source of growth for top multinational corporations. As such, an increasing number of people do business with China and its enterprises. One must navigate a myriad of social and cultural expectations to succeed in the Middle Kingdom.

China has unique culture and protocols which may seem quite mystifying and overwhelming. The Confucian traditional belief system, ethics, and behaviors along with the concept of guanxi: business relationships/connections that are functional remain at the heart of Chinese business culture and etiquette. The Chinese people place great importance on protocols, rankings, and relationships. China’s southern and coastal regions, as well as the larger cities, have an idea of what international business practice is all about. Also, the younger generations coming from an international education system have a modern approach to international commerce, yet they still conform to Chinese ways of doing things.

Understanding Traditional Values

Confucian concepts and values historically appreciate an honest, orderly and clean society where responsibilities and obligations are fulfilled. The major business concepts derived from Confucian values include:

1. Adhering to a Hierarchical Decision-Making System

This concept influences all aspects of Chinese life from home to school and work. Chinese hierarchy shows that the lower ranked official is subordinate to the superior, the minority view is subordinate to the majority opinion, and the individual is subordinate to the organization. Decision making typically delegates to just a few people, and it’s not transparent. In Chinese business setting, the hierarchy has a measurable impact. It determines how introductions occur, who enters a room first, who speaks, how sitting arrangements happen at dinner, meetings, and who has the final call on crucial decisions.

2. Collectiveness – Family or Group Orientation, not Individualism.

Usually for most of the Chinese businesses, the family is the foundation. The family-based model is quite apparent in China. Confucius added a moral dimension to collectivity and broadened it to a mutually dependent societal relationship where every individual has an important role as a link in the network of society. In China, there is no individualistic interest, and if you fail, you do it as a group, and the vice versa is also true.

3. MianZi or “Saving Face” Throughout Business Interactions

Face represents a person’s social status, pride, reputation, and image. Reputation is quite a necessary part of building relationships. A person’s face represents an organizations face hence the relationship developed with an individual is analogous to the one produced by the body. The Chinese people are quite sensitive about how to give, maintain and take away face in each aspect of life.

Criticizing individuals in public and disrespecting their status is the easiest way to make them lose face. Taking face from superiors can barrier relationship building. To give face, the Chinese people try to respect one’s seniority before their subordinates, arrange seats according to priority in meetings, arrive early for an appointment, provide better gifts for the seniors, publicly thank counterparts and also provide gifts to the whole team.

4. Concept of Neiren – Inner Circle vs. Weirin – Outer Circle

For anybody, considered Neirin, there is a very high level of confidence, loyalty, and trust associated with them. The people in such circle have common languages and interests and can get things done pretty quickly. They can be people from the same town, province, extended family, acquaintances, and colleagues. As a foreigner, you may be treated as Weiren, but if you employ Chinese staff or make networks and use your Chinese business agents, you just might succeed in breaking the ice.

5. The Concept of Guanxi.

Western business culture is mainly transaction- based, but the Chinese process is relationship-based. Whereas a successful business person in the West is considered wealthy, a successful Chinese business person is well-connected. Guanxi means connections/networks with mutual goodwill, personal affection and obligation with much emphasis on shared experiences and family.

Guanxi networks are such valuable information sources on issues especially in cases where there is an inadequacy in official channels. Since laws aren’t uniformly enforced in the society, guanxi networks are paramount in helping businesses deal with one another. More often than not, overseas Chinese would use these systems as an advantage, when in a society that treats suspicious clientele with suspicion.

Guanxi relationships result in favors that are expected to be returned in one way or another. Indebtedness for such favors can last for generations and will never be forgotten. When one returns the favor, it’s mostly in a bigger measure which strengthens the guanxi relationship further. There are countless guanxi in China and even if you might feel like an outsider to one, you are still inside to your own. You do not have to push harder in accessing another guanxi instead focus on cultivating your own.

Overseas Chinese usually act as a bridge for Westerners trying to access the Chinese market. If you are planning on traveling to China, a third party will provide you with contacts whereby you are expected to convey a greeting you can be able to build a healthy relationship from there. Westerners would ask about their profession during their first meeting, but Chinese ask more about where you are from or if you know a particular connection as they try to find any preexisting Guanxi network. If you have common friends or a relative that the person you are getting to know has an idea about, then much goodwill will be generated. But if not, showing interest in your acquaintance’s background might be an excellent way to develop a relationship.

These relationships do not happen overnight; you slowly cultivate them until they develop into something long-term. To them, it goes beyond the money and big dinners but more important if you show commitment and sincerity to the relationship. Remember that guanxi relationships are not among companies but individuals. While in a group, try and extend your network beyond one person because if your contact happens to leave, you wouldn’t be left on shaky ground.

Validate the authenticity of a certain guanxi before establishing a relationship since if you have a guanxi relationship with somebody with a bad reputation, and it will ultimately keep you out of other guanxi. Exchange of symbolic gifts goes a big way in strengthening the relationship. Guanxi relationships maintain using a constant exchange of favors and communication.

It can be resource-intensive and time-consuming when trying to develop and nurture guanxi, but it is a worthy investment since the returns are a bounty. Maintain regular contacts with your guanxi and ensure that the networks are relevant to your career or business. Focus on individuals who have decision makers or key influencers contacts or better still make the contact with the influential senior officials on your own.

China is a key player in building partnership thanks to their unique business strategy. Relationships are the main focus of Chinese business and if you are planning to do business in China, then get ready to invest in guanxi since it’s quite a strategic starting point. The Chinese consider the impact of decisions not only on the transaction but more on the network. To them, the relationship is more important than even the transaction. As an expat in China, if you understand the pivotal role of trust and Guanxi then you will always have work since you will always be connected.

Latest posts by Yuri Khlystov (see all)