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For many years I´ve had been doing business in China and have learnt and got acquainted with the Chinese customs a lot. When I first entered the country, compared to now, a lot has happened and stepping out now at the Beijing or any other international airport is very different to the ages ago, when I first set foot in this stunning and challenging country.
Being one of the first-generation expats that had been conducting business in China certainly was even more challenging back then, compared to today. But it also had its advantages, as anything that you may start at one point when looking back. And like everything in life after so many years, you´ll have many stories to share, and skills and experience to pass on. While many of the stories are hilarious to experience, some are also a bit disturbing. But back in the day there was not so much knowledge on Chinese customs and cultural habits as we have today.
Packing this all together into a small blog post is similar difficult to me now, as there is so much knowledge and experience to fill several books with. Therefore, I'd like to show the difference between Guangxi compared to “customs” and why these are so important in this country.
Guangxi (Chinese: 關係 / 关系, Pinyin: guanxi) refers to personal relationships that you have to someone in China, on a very high level of trust. These personal relationships are very important to do business in China successfully. Chinese people trust persons more that they are personally attached to. Similar to this is networking over here, while networking is not as deeply rooted as Guangxi are.
The first time I learnt how important Guangxi are is a very funny story. For some years I´ve conducted business in China with a government official in a higher rank, through my network. Over time we learnt to trust and respect each other and became friends. This friendship was tightened by travel between each other and getting to know our families and background better. So when my friend had an upcoming birthday, I wanted to surprise her with a clock that I believed at this time would make her happy.
During exactly that time I was also mediating a negotiation between a western firm and this government agency. I didn´t put much thought into this and was sending out that clock to her, prior to attending a meeting with our western client and their Chinese affiliates, as well as the government officials.
While sitting in Beijing in our pre-meeting, I mentioned her birthday and that I sent her a clock. I still remember our western client´s Chinese affiliates reaction when they asked in disbelieve, if I really did send her a clock. This first reaction certainly made our western client very nervous resulting in the question if there is any problem. After some eye contact, their Chinese affiliate turned to them and explained to them through an English interpreter the meaning of sending someone a clock, that is that someone´s lifetime runs out. This certainly discouraged the Chinese affiliate, the western client and resulted in me being blamed prior of attending the meeting that this deal will only fail because of my actions.
This outcome would have been certain back then, but neither the Chinese affiliate nor the western partner considered my Guangxi that I've established over years with this government agency as well as the personal bond that the government official in charge and I developed.
The meeting started, and after a few minutes the government official in charge interrupted the Chinese affiliate of our western client, mentioning the clock I sent her back then. At this point the Chinese was ready to abandon us, when the government official said directly to me: “Well, thank you for this clock, but there is only one problem with it, we do not know how to assemble it and mount it to our wall. Would you mind stopping by later tonight to take care of this?Our family would cook for you and we would have a private dinner at our house.”
While even the Chinese affiliate of our western client was discouraged in the beginning, the disbelief created by a personal invitation to attend a personal dinner with the family of a government official was even more surprising to him.
This story is a great learning experience to maneuver yourself through Chinese customs and seeing that there are many diverse factors to an approach and to doing business in China, and that it´s important to understand how to maneuver through China. It also shows how Guangxi can affect assumptions to a potential outcome.
If you´d like to learn more about Chinese customs and how to do business in China, some pitfalls to avoid and more, feel free to join one of my upcoming seminars on this.
Our expert has been doing business with Chinese government officials as well as medium and large corporations throughout China, representing both the Chinese side as well as US-American and European companies for many years. His business trips brought him to remote locations within the Chinese People´s Republic and many other major cities such as Hong Kong, Shanghai, Beijing, Chengdu, Dalian, Chongqing, Shenyang. He was acting as liaison for business activities also with Chinese Government Officials outside of China and can still call many of them friends till today.