The Concept of "Guanxi" in Chinese Culture

This is essentially part two of a two-part article. Before reading this article about guanxi, I strongly suggest you read the face article first by clicking here.

"GUANXI" AND "FACE"

Corollary to face is the inseparable concept of guanxi or "relations".

Face and guanxi work hand-in-hand. One without the other renders useless the dynamic these two concepts collectively work together. Where face is the substance - the fuel - that makes the Chinese business engine turn over, guanxi is the "personalized glue" that makes it all stick together as a working dynamic.

Arising from the concept of guanxi, concept: one may open guanxi (initiate relations), have guanxi (have clout), or pull guanxi (exercise some clout). I will discuss each of these later.

To read a really interesting story on how guanxi kept me from going to prison in China, click here.

Also, a very brief and more humorous piece on guanxi, click here.

HOW IS CHINESE GUANXI DIFFERENT FROM WESTERN NETWORKING?

Above I mention that guanxi is like a "personalized glue". This is for good reason: because it is the very personal character of guanxi "relations" which sets it off from other more casual (less meaningful?) business relations that folks have in the West.

As a contrast to Western business culture, I would specifically like to point out that any need for depth in relations in Western business has been somewhat obviated - made unnecessary. How?

Contract law. Namely: enforceable contract law.

While China does indeed does have specific laws pertaining to business contracts, the meaning and interpretation of these laws are not entirely clear. Likewise, enforcement of contract law is still somewhat spotty at best. In the end, it's how strong your relations with the other person are - this is what matters.

PERSONAL RELATIONS VS. LAWSUITS?

If you have good guanxi with the person sitting across the table, business with them will go well. If guanxi between partners has been suffering, likewise business will drop in volume and quality. What's good about this is that relations can be mended over time, and become as good or better than ever. In the East (China), business activities bank strongly on personal relations.

In the West, we have a highly litigious society. Any chance for mending through personal relations is cut off once someone files a law suit. The strength of any personal relations is greatly diminished, and folks can count on going to court to get a contract enforced, disputed, or settled. Some Western companies even go so far as to earmark substantial sums of money for lawsuits - all as a part of their company's operational budget! Is that sick?

(WHAT DO YOU THINK? What would you prefer? Flexible relations with a chance for repair? Or expensive lawsuits? If you have an opinion on this, write it into the comment box on this page...)
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THE GUANXI STORY

In the face article, I spoke of an investor who wanted to make inroads to the textile industry. This is where the face story left off, and where the concept of guanxi takes over.

Let's assume our investor friend from the face article was already well-known to the textile magnate through hearsay. In this case, the investor would already have established face. BUT, the investor wouldn't have an ounce of guanxi: the investor is in no way personally related to the textile magnate. Therefore: if no personal connection, then no deal could arise. OR the deal would at least be a long time in the making. Any up-front time spent would be in establishing guanxi - the "relations glue" that binds people together.

This is where the "commutative law of guanxi" can help out.

LENDING GUANXI

Similar to the "lending face" concept in the face article, one may effectively "lend" someone else a chance to establish guanxi. Sure, you may have face, but to have the relations that equate to having a foot in the doorway - that can be tricky. Without an intro, meeting up with your prospect will be hard to pull off.

Once you find someone else who can give you that intro, you're in business. You can meet up, and the one who helped arrange the meeting can provide you with that warm introduction - effectively lending you some of their clout: guanxi.

A = B = C - THE COMMUTATIVE LAW OF GUANXI

OPENING GUANXI

Thus, where you are party A, your friend introducing you is party B stands in the middle, and the folks you wish to meet are party C. By arranging this meeting for you and acting as a kind of common middle for the two of you (A and C), a bond has been formed. In the end you have opened up guanxi between you.

A = B = C.

In establishing guanxi by the above means (or through other methods), you have "opened guanxi".

HAVE GUANXI

Quiet simply, after relations have been established, any activities dedicated toward maintaining that relation (as well as the relation itself) are collectively called having guanxi.

Usually, when discussing the business needs of a friend of yours, and you see that have guanxi with someone who can help them address those needs, you can proudly say (preferably in Chinese of course), "I have guanxi with a friend who can help you."

It goes without saying, if you have loads of guanxi with loads of people, it gives you great face. People will seek you out as a "business connection hub" - a business matchmaker so to speak - and you can charge a fee or negotiate royalties after making an arrangement that ends up paying off.

PULL GUANXI

Let's say your friend in need asks you to call upon the other friend who can help. By roping in the help of that other friend, you are "pulling" guanxi, or exercising your clout with that other friend. This is guanxi in action, or "pulling" guanxi (as it's said in Chinese).

STRENGTH LEVELS OF GUANXI

Almost exactly as it is in the relations seen in other cultures (including the Western cultures) the bonds of guanxi come in various strengths. Depending on the kind of guanxi you have with someone else, the bond attributed to that level of guanxi may call upon you to rank your loyalties toward one person over another.

I will list the general levels of guanxi below according to strongest first:

Guanxi through Blood relation: Guanxi is automatically established through blood relations and is generally considered the strongest kind of guanxi there is. Relations under this category generally include relations among siblings, and parents' direct relations to their children. Interestingly, some husbands and wives may consider the bond between the two of them (even after childbearing) as somewhat expendable. See comment below in "Guanxi through marriage".

[Sub-Culture Note: Triad Guanxi: There are powerful (and sometimes bizarre) ancient rituals commonly attributed to Chinese triads (gangs), which are rumored to still exist today. Sometimes one can see remnants of these rituals in dramatic kung fu movies. The aim of these rituals is to establish the strongest guanxi (through blood relations) among gangster men who could otherwise not have this bond. By forming this bond together, they will be able to serve each other, trust each other with one another's lives.

In this ritual, gangsters unrelated to each other desiring to be bonded together would each cut a slit in the palm of their hands and slap their palms together in a firm handshake, thus allowing their blood to flow down their palms together onto the earth. Sometimes this ritual is accompanied by tying the hands together with a cord or piece of cloth. By allowing their blood to flow together, the men are united by blood, the most powerful form of guanxi.

Because of recent concerns over the transmission of AIDS and other blood-borne diseases, it is said now that men desiring this kind of bonding will now allow the blood from their hands to flow together onto a plate or onto the earth without the handshake.

It is rumored that other less adventuresome men, such as businessmen making huge deals that will make or break their careers will each sacrifice chickens together, allowing the blood of the chickens to flow together in the place of their own blood.]

Guanxi through marriage: This form of guanxi is sometimes equated to blood guanxi in the sense that you and your spouse have decided to "mix your blood", to "make your blood become one" through sexual intercourse in order to produce offspring that is the living product of this mixing of blood.

Some men or women look upon their guanxi with their children as being stronger than the guanxi with their own spouse, because after their sexual comingling, the two spouses walk away with the blood in their bodies still separated. In this kind of marriage, guanxi strength ultimately lies in their living commitment to each other.

Guanxi through friends: People may become friends through business transactions, school, casual meetings, etc. Bonds of friendship constitute strong guanxi also, but are usually subservient to those discussed above.

There are exceptions to this, especially when in modern China (in larger cities) where the value of money is often equated to blood. This said, when people engage in business involving a lot of money, that money is sometimes effectively looked upon as blood. If there is enough money involved, some people will go so far as to neglect their families as a conscious choice to nurture business instead.

EXCEPTIONS, OPEN-MINDEDNESS

As is the way of this world, there are always exceptions, two of which are mentioned above. Just as Chinese folks subject to guanxi may take exception to the general rules, so should non-Chinese folks likewise keep an open mind on how things are run in people's relations in Chinese culture.

GUANXI IN THE REAL WORLD

I know of certain Westerners who have honored the guanxi concept through marriage to a Chinese spouse. Some folks even go so far as to marry their business partners! How wonderful! They are gathering one or more layers of guanxi together and combining them into one. One such example is the marriage of an Australian man (I forget his name) to his lovely Chinese wife/business partner, Sally (AKA the radiant "Shanghai Sally"), who collectively own two famous Shanghai city landmarks: Viva El Popo Mexican Restaurant and Sally's Too disco bar.

Again, face and guanxi work hand-in-hand. Where face is the substance backing up a relationship, guanxi is the "glue" that makes the relationship stick together.

It's interesting to see the ordering of guanxi as described above play out in Chinese corporate culture. It is not surprising to see friends and family mixed into a business, as if all one happy family, which they sometimes end up being if not already.

It's also interesting to see these same dynamics playing out in the Western world. In the West, folks may do things a little differently and use different words. But the similarities outweigh the differences, lending argument that we are all of the same family: brothers and sisters of a Greater Guanxi coursing throughout the world.

Have fun exploring....