Doing Business in China

Guanxi - Developing Relationships

My wife has asked me to write a couple of blog installments while she is back in the USA and I am still in Shanghai.

The last few weeks I’ve taken the opportunity to do some business travel to meet some suppliers to our operation here in Shanghai. My visits were to areas of China that I have never been so the sights and scenery were a little different than that of Shanghai. Some of the areas I visited looked very much like mountains of North Carolina where our US home is located, so I felt very much at home.

The thing I found most interesting about the trips was the time spent with our suppliers. Some of the interaction was at the manufacturing facilities during my tour and meetings, but the most important interaction was at lunch or dinner. In China, a very important part of doing business is developing a relationship with your customer, client, or supplier. In China this is called “guanxi”. Guanxi literally means "relationships” and is really any type of non-family relationship. In business it is the network of relationships among individuals or companies that cooperate together and support one another. In the USA we generally try to form a partnership between two companies as well that benefits both companies. In China, this partnership is much more complex and often looks almost illegal from a westerner’s point of view.

Guanxi can take on many forms. It is sometimes based on money that is generally given in a red envelope, but in business, most times it is just an understanding and a feeling of trust between two companies or individuals. You want to do business with someone that you can trust completely. Guanxi is widely involved in the Chinese business culture with government interactions. Many times government Party officials or managers in Customs or other offices are given gifts or “red–envelope” money as a way to help cultivate a working relationship. In many cultures, including maybe the USA, these payments or gifts may be seen as a way to skirt the law – a bribe. In China, it is not a bribe but is just a cost of getting things done efficiently. It is completely legal in Chinese culture and not regarded as bribery in any way. Trustworthiness of both the company and individual is an important part of guanxi. Following through on promises is also important. Developing this guanxi can take much time. It is really like building a long term friendship. The Chinese feel obligated to do business with their friends first.

A major way to build this relationship between two companies is through a somewhat formal lunch or dinner. Many times spouses or children are also involved.

The planning of meals and interaction during meals is a very interesting part of the Chinese culture and the building of guanxi between individuals or companies. I had heard and read much about proper etiquette during a Chinese business meal. Much of what I learned was exactly what I encountered during the business meals of my trip.

Next blog installment…the Chinese business lunch/dinner and what I had no choice but to eat.

Emergency Leave

Being Flexible and Available to Family

I am writing from our home in the beautiful Carolina Blue Ridge Mountains. I arrived home a few days ago. I’ve not blogged due to arranging and preparing for the trip. One of our daughters was broadsided by another driver who failed to stop at a red light. Luckily she was unharmed, but our Volvo wagon wasn’t so lucky. The wreck, along with some other family issues, pushed my scheduled home leave up a month. I will be in the states for six weeks to take care of as many matters as possible. From what I have been told, I’ll be returning just in time to experience the sweltering Shanghai summer in all its muggy, mosquito-y splendor.

Coming home is bittersweet. My husband and I hate being apart, especially now that we’re on opposite sides of the world. But it does my soul good to hug and laugh with my growns. I’m home just in time to celebrate our firstborn’s 28th birthday. I’m also scheduled to see other family and many friends.

My husband and I meet online every morning and evening to connect and discuss our days. I make a point to handle stateside matters in as positive manner as possible, there’s no sense in worrying my husband with issues that he can do little about in China. He’s already dealing with a hefty amount of guilt for being so far removed from his loved ones. He, in turn, shows me the same courtesy by handling all Shanghai issues. We prefer to work as a team, side by side, but we do what we have to do when times like these emerge. ~ Just so you know, it took us several botched attempts and loads of blaming and whining our last expat assignment before we learned to handle issues effectively.

Ever the opportunist, my husband is taking advantage of my time away by traveling for business over the next few weeks. I have asked him to pen the next few blogs. Stay tuned to read his take on establishing business relationships or "guanxi" - select this link to learn more about this important part of Chinese business culture.