What is guanxi?
Post 2 of 26
Hi Beagle, you bring up a great point. Yes, I too believe there is a fine line between Guanxi and Bribery. In my opinion, the answer though is simple. There is nothing wrong doing transaction based on Guanxi. If you are exposed, the law will not go after you. If a Bribery gets exposed, then you fall into trouble. This is the same with client/supplier relations in the business world.
Again, I believe the root cause is the legal system in China is still developing. I think it's important to understand that there is so much change when a **** country such as China adopts a capitalistic market model. The role of the government officials is continually changing, and many can not adopt quickly enough to the changes in society. People with power are also always reluctant to let it go. This is the same in any society. The great people in history relinquish it for the benefit of society, but how many great people are out there... I believe China is developed enough though and the market is hot enough to give any entrepreneur an opportunity to succeed. IMO, opportunities here are far more available than in any other country I have been to and I have seen so many honest, successful entrepreneurs.
As far as fair competition, I think you will face the same obstacles in any other society. In the US, felons get pardoned because of connections, while innocent people stay in jail. It just doesn't get as much publicity, while in China it gets more publicity because people are not familiar with things. People with money and insurance get the best health care treatment while those without may not get the right healthcare. The world is not fair... Yes, again a more transparent legal system will definitely help (especially for foreigners). But at this point as far as business it's most important to learn how the "game" is played here. Everybody has their game plan and incentives and on the whole, I've seen people act realistically based on the actions that you decide. Nobody ever said business was easy...
Again, I believe the root cause is the legal system in China is still developing. I think it's important to understand that there is so much change when a **** country such as China adopts a capitalistic market model. The role of the government officials is continually changing, and many can not adopt quickly enough to the changes in society. People with power are also always reluctant to let it go. This is the same in any society. The great people in history relinquish it for the benefit of society, but how many great people are out there... I believe China is developed enough though and the market is hot enough to give any entrepreneur an opportunity to succeed. IMO, opportunities here are far more available than in any other country I have been to and I have seen so many honest, successful entrepreneurs.
As far as fair competition, I think you will face the same obstacles in any other society. In the US, felons get pardoned because of connections, while innocent people stay in jail. It just doesn't get as much publicity, while in China it gets more publicity because people are not familiar with things. People with money and insurance get the best health care treatment while those without may not get the right healthcare. The world is not fair... Yes, again a more transparent legal system will definitely help (especially for foreigners). But at this point as far as business it's most important to learn how the "game" is played here. Everybody has their game plan and incentives and on the whole, I've seen people act realistically based on the actions that you decide. Nobody ever said business was easy...
16 Nov 2005 21:51
Post 3 of 26
In China this is mean about relationship and face .
for example if you are a good friends of me ,i sail nonwoven fabric .for first time you buy some quantity from me .
for seconed time if you want to buy nonwoven fabric ,if you feel our price too high ,you talked to me ,than i will think of reduce ther price for you.
evan if this price is equal to our cost .with the relationship we will sell to you.
do you understand.
i think this incloud friendship
for example if you are a good friends of me ,i sail nonwoven fabric .for first time you buy some quantity from me .
for seconed time if you want to buy nonwoven fabric ,if you feel our price too high ,you talked to me ,than i will think of reduce ther price for you.
evan if this price is equal to our cost .with the relationship we will sell to you.
do you understand.
i think this incloud friendship
16 Nov 2005 22:47
Post 6 of 26
In China ,guanxi have different meanings in different situations! It is very important to get the good guanxi in China, However,it is the reason that the company cann't be too big .It is a traditional culture in China. In fact ,relation isn't the true meaning of guanxi .A foreigner who don't stuay the culture will not understand the guanxi in China!
29 Nov 2005 07:23
Post 8 of 26
yeah,guanxi is a chinese word ,jack2's understand is right.
13 Dec 2005 05:56
Post 9 of 26
Replying to mapleleaf13:
This is the truth about Gaungxi:
It means having relationships. The theory is that these relationships are supposed to make your business life more easy.
However after 5 plus years of on ground sourcing in china this how I see them:
Guangxi is only useful if the people are sincere. 90% of the time people are not sincere and they will try to use their relationships to control you and make themselves money. So from a business perspective it is pretty much a waste.
Next concept is Face: Chinese especially people from Zhejiang want to be respected. So they want you to give them face. They think that if they take you out and spend some money on you that it will buy your order and your respect.
In business face is a bunch of bs. So you should be very careful in China who you give face. I am not saying do not be cordial but remember the following:
1 China companies only want money period.
2 Face = as a customer your face is Benajamin Franklin becuase that is all that matters.
3 Money talks and well you know the rest.
4 control information flow.
i hope this helps. if you are doing business be very careful in china. or contact me.
This is the truth about Gaungxi:
It means having relationships. The theory is that these relationships are supposed to make your business life more easy.
However after 5 plus years of on ground sourcing in china this how I see them:
Guangxi is only useful if the people are sincere. 90% of the time people are not sincere and they will try to use their relationships to control you and make themselves money. So from a business perspective it is pretty much a waste.
Next concept is Face: Chinese especially people from Zhejiang want to be respected. So they want you to give them face. They think that if they take you out and spend some money on you that it will buy your order and your respect.
In business face is a bunch of bs. So you should be very careful in China who you give face. I am not saying do not be cordial but remember the following:
1 China companies only want money period.
2 Face = as a customer your face is Benajamin Franklin becuase that is all that matters.
3 Money talks and well you know the rest.
4 control information flow.
i hope this helps. if you are doing business be very careful in china. or contact me.
13 Dec 2005 06:11
Post 10 of 26
Replying to evans:
that is not guangxi.
That is getting cheated by the manufacturer
Gaungxi is getting the best price based on COR before you make that first purchase.
that is not guangxi.
That is getting cheated by the manufacturer
Gaungxi is getting the best price based on COR before you make that first purchase.
13 Dec 2005 06:14