HOW TO DO BUSINESS WITH THE CHINESE

 

GUANXI

Bamboo Network

Asian Concepts

VIGNETTES ON BOTH SIDES OF THE PACIFIC

 


  • You Say Guanxi, I Say Scmoozing
  • "A lot of people don't understand that everything is a human-to-human relationship.   It's not who knows who, it's how you build the relationship.   And its not how long you've known each other; its how you deal with each other.   That is the highest technique." - K.Y. Ho, founder of ATI Technologies - on page 49 of December 25 - January 14, 2007   CANADIAN BUSINESS MAGAZINE

The Chinese art of using relationships and connection

"  Chinese are masters of guanxi, or connections, using the art of relationships - and its close companion, corruption - to secure everything from safe childbirth to a prestigious burial, taking in education, jobs, a fancy home and a Porsche Cayenne SUV along the way".   

According to an article in the New York Times, details include: inviting powerful people to dinner (do not get your guest too drunk, he might forget what you talked about); giving red packets (de rigueur in hospitals); and giving gifts (present in person, shut the doors and windows first).    >> MORE

Guanxi or the Bamboo Network refers to the network of relationships capitalized on by mobility of enterprise of people, capital, information affecting the internationalization of Chinese family businesses around the world.   The use of personal influence is the essence of Guanxi.  The Chinese, both at home and overseas, have always traded on relationships.  The concept that business should grow from friendship is a fundamentally Chinese concept.  Don't repeat the short-sighted mistake by bypassing a middleman for increased gain. 

In the West, the prescribed roadmaps are encompassed in 'The System' including all levels of government and society.  For Asians expanding abroad, learning 'The System' in the west involving unions, lobby groups etc. prove a major obstacle. Long term relationships reduce risks and are mutually beneficial.  For westerners, that means respecting the Asian logic and practice that the bureaucrat issuing permits might also be the inspector!  Have respect for Asian flexibility as fiscally responsible dealmakers.

The concept of Guanxi still continues in modern day business.  In my professional career, the fact that I was good enough for billionaires Li's, Kwok's or Woo meant that I also was referred positively to their friends (ensured steady flow of work). 

THE SYSTEM

The hierarchy of Confucian relationships is the order system for the Chinese society.  It is the fundamental value for which "Face" is based.  Staying within concentric influences of family and elders allows for access to information more efficiently while preserving confidentiality.  The network, known as the Bamboo Wire, is based on Guanxi to allow business opportunities to flourish.

The network Richard Li set up internationally by selling STAR-TV to Rupert Murdoch allowed the Pacific Century Group to be the cowboys at the frontier of the "Anything's possible" corporate culture.   I was one of the ones from the School of Hard Knocks despite the fact that there seemed to be a lot of Harvard, Yale, Cambridge, Stanford, INSEAD degrees at the office.  Our ability to generate "interesting" deals was based on the access to a valuable network. We were restricted only by our imaginations. And can you believe?  The CFO, head of Legal, Real Estate and Business Development were women, all under 40, amongst the world's most capable professional managers.   That Richard Li has am amazing ability to attract talent.   I am talking about the first team at Pacific Century when the group was formed in 1993.  - by Andrea Eng 

                                           

 

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