Importance of Relationships in Business

One of the first things a new entrant needs to understand about doing business in China is “Guanxi.” The term guanxi, which means "relationships" is one that is well understood by the Chinese. There exists in the Chinese business world, a well developed network of relationships among individuals and firms that helps foster a healthy cooperation among the players. The business philosophy here is built on the concept of "You scratch my back, I’ll scratch yours." Having the right "Guanxi" or connections in the right places, can make all the difference to achieving success in business.

More on "Guanxi"

As in any other part of the world, the Chinese prefer to confine their business dealings to people they know and trust. The process of relationship building is an ongoing one. If your organisation is able to establish the right connections or "Guanxi" in this intricate networking system, you will be able to minimise the initial risks, and disappointments that are common to westerners attempting to do business in China for the first time. As this can make or break the success of your business ventures here, pay close attention to the appropriate Chinese network that concerns your field of operations and try to establish good "Guanxi" with them. This can lead to new contacts and resources, and will thus further your chances of a winning relationship.

Establishing a Business Relationship

The Chinese love to exchange business cards, so make sure to bring them when visiting China. As far as gifts go, it would be best that you avoid offering anything that’s too expensive. In the current climate of serious campaigning against bribery, an expensive gift may be construed as an attempt at offering a bribe, and may not augur well for the relationship.

The Chinese Language

With the worldwide Chinese population estimated at one in five people, some knowledge of Chinese can only be helpful to any person in business, and especially so if you are proposing to do business with the Chinese directly. There are hundreds of dialects of the Chinese language that are in use over the many geographical regions of this vast country. Mandarin is the official dialect, and is understood by Chinese speakers of all dialects. If you manage to acquire a basic knowledge of Mandarin, you should be able to communicate with almost anyone across the country.

Basic Chinese words and phrases

Some of the useful words and phrases that can help you communicate effectively during your stay in China are:

How are you? Ni Hao Ma (often shortened to Ni Hao).
Thank You: Xie Xie.
Very Good: Hen Hao.
Not Good: Bu Hao. (commenting on a shoddy or incomplete job or task).
Very Expensive: Hen Gui (the best term to use when driving a hard bargain at a shop or market).
I Don't want it: No Bu Yao (the best term to use for touts - street hawkers who approach you at every tourist stop to ask you to buy things).
This is beautiful: Hen Piao Liang (this is high praise).
Taxi: De Shi
Good Bye or See You Again: Zai Jian
Excuse Me: Jie Guo
Receipt: Fa Piao

Conclusion

China offers vast business potential, overflowing with resources and low cost labour, and is therefore a highly attractive destination for western firms seeking to do business there. A solid grasp of the vital 'Guanxi' approach to relationship building, together with an outline knowledge of some of the main business practices and elements of the Mandarin language can only enhance the potential value of any business visit to China.

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Caroline Middleton is a researcher and writer on financial and business topics.

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