"Business is all about relationships," say many executives. This is
even truer in China. The word "guanxi" in Chinese means
"relationship," but it also a concept or a philosophy.
If you have "guanxi," you are fortunate enough to have a strong
network of contacts. These contacts are often much richer than what
is considered a contact in the West. Rather than just knowing some
cursory information, a contact in China is often bound to you by
personal obligation. In other words, they owe you one. The value in
the contacts lies in the ability to call in these favors.
Building relationships in China takes time. It takes place over the
course of years, not days or months. To develop "guanxi" one must
provide at least as many favors as you accept.
In the United States, the Sarbanes-Oxley Act of 2002 was a reaction
to many corporate accounting scandals including Enron. The
legislation also set new standards for appropriate business gifts.
Yet in China, gift giving is still widely accepted in the business
world. However, it is illegal to give gifts to a government
official. Gifts are a great way to build "guanxi."
Gifts given in China though must take into account local customs.
Gift must strike a balance between being too frugal or too
extravagant. If a gift is too frugal, you will be seen as someone
that does not value the relationship. Gifts that are too
extravagant may cause the receiver to feel obliged to reciprocate.
Don't hesitate to ask the receiver what they would like. And expect
them to do the same. Gifts should not be given in quantities of
four, since that number signifies death. The number eight is lucky
though. Business gifts should typically not be given in private,
while personal gifts are often given privately.
Don't be surprised if your gift is not opened right away. Opening a
gift too quickly is a sign of greed. The receiver may also decline
your gift three times before accepting. Accepting a gift too
quickly can also signify greed.
Colors in China often have many meanings. These meanings may even
change from region to region. So it is important to be careful when
wrapping your gift. Red is typically the safest color. A good trick
is to have the gift wrapped at the store.