Business Culture

China/Taiwan

Some most important business concepts

Guanxi (Personal Connections)

For Chinese “Guanxi” is a most important business concept; however, most Americans or Westerner did not understand this concept well and did not know how important it is when doing business with Chinese.

Guanxi translates in English is “personal connections”. However, “personal connection” doesn’t do justice to the fundamental, and complex concept of Guanxi. Guanxi can be stated as an individual’s social capital within their group of friends, relatives, and close associates.

Guanxi can be raised by a strict system of reciprocity, or what the Chinese call hui bao. In other words, when you do a favor to A, you are collecting your social capital and under the system of reciprocity you can expect A will do you a favor in the future when you need. The reciprocity does not mean immediate; but in a sense of future help. Chinese and Taiwanese enhance their guanxi through reciprocating back and forth. More often than not, the person with the best “guanxi” wins the buisness.

Zhong Jian Ren (The Intermediary)

The concept of “Zhong Jian Ren” can be explained by the following two aspects. First of all, Zhong Jian Ren can be seen as a door. When you want to do business with a company in China, there is a wall between you and the company. Without the door, the intermediary, you can not knock the door of the company or even no one will answer you phone call. Therefore, Zhong Jian Ren can be seen as a connection between you and the company.

Second, Zhong Jian Ren can help to construct the trust. In U.S. people tend to trust others until there is reason not to trust. In China, suspicion and distrust characterize all meetings with strangers. Usually trust is transmitted via guanxi. A good intermediary can enhance the guanxi and construct the trust.

Mianzi (“Face” or Social Capital)