Understanding Guan XI and leveraging its benefits

The notion of "guanxi" – literally "relationships" – in the Chinese business world is at once both simple and complex; easily explained as "You scratch my back, I'll scratch yours," but consisting of layer upon layer of nuanced protocols, where a misstep can sink even the most sure-fire deals. In essence, "guanxi" boils down to the exchanging of favours, which is deeply woven into the Chinese cultural fabric. Therefore, it is an important concept to understand in doing business in China.


Once you accept "guanxi" as a given element in Chinese business and learn how to deploy it strategically and in a genuine manner, you'll find yourself in awe as to the doors it can open. Still, there are many foreign enterprises and individual purchasers who insist on rigidly applying the practices of their home country in China, without finding a happing medium in the mainland's supply chainculture. More than not, these types struggle to be successful, and in many cases come away from China having failed miserably.

In addition to helping to win favorable contracts, one's "guanxi" can also pay off in resolving purchasing disputes and legal issues. While our own building of relationship in China has resulted brought our people a great deal of success as an "on the ground" purchaser and purchasing manager, We at World One Sourcing (HK) are also proud of the work we've done in troubleshooting along the supply chain.

Through our teams extensive China experience, we are able to consult with clients and share with them what we think of as "best practices" in developing and successfully leveraging "guanxi" in China, doing so in smart ways that maintain an enterprise's business integrity.

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