In China, it is said that anything of consequence in business is done through "guanxi". "Guanxi" refers to the conduct of relationships, the art of "you scratch my back, I scratch yours" socio-business culture in China. The appropriate "guanxi" creates a smooth path in wake of potentially cumbersome administrative procedures. In business dealings with the Chinese, knowing the 'right person' is of paramount importance. For example, if the signing of a contract has stalled in spite of the polite words of assurance and head nodding, it can be assumed that the proper relationship has not been developed; that one has not had the appropriate "guanxi". This presents a big headache to the potential business person as a stalled initiative can mean months or even years of delay. In a recent interview of a small business owner from the US, it was asked, "What is the single most important thing a person needs in order to do business in China?" The answer was "Without a doubt, working with people you can trust." Here’s how one gets the appropriate guanxi:
1) Being able to communicate across language barriers
2) Understanding the Chinese culture
3) Cultivating the right Chinese people who can produce your desired outcomes
Action Steps
The best contacts and resources to help you get it done
Communicate Across Language Barriers
If you don't know the Chinese language, at least make yourself understood or get a friend who knows the language to go speak together with you. People may be able to understand you speaking in English, but be prepared to pay a hefty price for that.
I recommend: Mandarin House provides an intensive course in the Chinese language targeted at expatriates in Shanghai.
Shanghai House Of Entrepreneurs are a group of young bilingual student translators from Singapore in Shanghai who are able to effectively solve any language problems you may encounter in China.
Understand the Chinese People
Michael Conolly, an expat in Shanghai, notes: "Learning to understand cultural expectations is not something that can be done overnight or by simply reading a book. Specific actions that allow one to develop guanxi in Chinese culture might seem to the Western mind improper but the basic premise is the same: Working with people that can be trusted is crucial to success."
I recommend: Guanxi.com is a website in China which enables users to expand their circle of friends and business contacts in China.
Shanghai Expat is an online community of expatriates in Shanghai, who offer tips and tricks to working and living in China.
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