AmCham-China Daily

Probably the first time you ever considered doing business in China you heard about the critical value of guanxi, or connections. In the old days business could not be done here without strong guanxi, although many people have made the mistake of thinking it was the most important component, ignoring other factors along the way. In truth, you need to have a good plan in addition to trusted connections.

The topic of guanxi came up during the ‘Partner Management’ portion of AmCham-China’s first annual ‘SME Conference.’ The panel included Jeremy Goldkorn (Danwei.org and Standards Group), David Wood (The ChinaCare Group), John O. Hjelset (Norse Dragon Co Ltd,

Several of the participants admitted that they had originally under-estimated the value of connections, and thought that if they simply had a good business model and a strong planning that they would succeed in China. However, trial and error taught them that, while guanxi is not the be-all and end-all, it is nonetheless important. (They also pointed that this is not a fact confined to China.) There was a consensus that the culture in Beijing and Shanghai now focuses less on the old-style relationship building of baijiu and KTV that was once ubiquitous, but that the substance of building trust nonetheless endured.

All of this leads to an obvious question with a number of different viewpoints: In modern China, just how important is guanxi?