Frequently Asked Questions
Q: Why is it so difficult to do business in China?
A: Business in China is based on trust relationships and that trust can only be achieved after many meetings to get to know each other or through connections in a guanxi. (see right column)

Q: How do we get to know the right people?
A: Use a consultant who has the guanxi through which he/she can open the right doors and introduce people to build the relationship with.

Q: How is business done in China?
A: Western people focus on negotiating a contract and following that contract by the letter. In China a contract is typically only an understanding of the cooperation. Be prepared to be flexible in the execution of the contract as many deviations from the contract will take place. Trust that the intentions of the Chinese partners are good and honest. Keep a healthy critical eye on the situation and be prepared to negotiate every deviation. Never forget to communicate with your Chinese partner. A local consultant like SIBCO can help in these situations.
Guanxi describes the basic dynamic in personalized networks of influence, and is a central idea in Chinese society. At its most basic, guanxi describes a personal connection between two people in which one is able to prevail upon another to perform a favor or service, or be prevailed upon. The two people need not be of equal social status. Guanxi can also be used to describe a network of contacts, which an individual can call upon when something needs to be done, and through which he or she can exert influence on behalf of another. In addition, guanxi can describe a state of general understanding between two people: "he/she is aware of my wants/needs and will take them into account when deciding her/his course of future actions which concern or could concern me without any specific discussion or request".
Guanxi refers to the benefits gained from social connections and usually extends from extended family, school friends, workmates and members of common clubs or organizations. It is custom for Chinese people to cultivate an intricate web of guanxi relationships, which may expand in a huge number of directions, and includes lifelong relationships. Staying in contact with members of your network is not necessary to bind reciprocal obligations. Reciprocal favors are the key factor to maintaining one's guanxi web, failure to reciprocate is considered an unforgivable offense. The more you ask of someone the more you owe them. Guanxi can perpetuate a never ending cycle of favors.
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