Do you and your brother have the same mother?
It had taken a while before it dawned on me, what my businessman friend was asking. I had mentioned my brother was a professor at the University of Melbourne that his daughter wished to attend as an international student. My business friend was referring to what is known as “gē men”, a term that roughly translates as a friend who is so close, you are like brothers.
Chinese value relationships so greatly, they are an integral part of a business. You can’t just get off the plane in Shanghai, ring up a few manufacturers and expect to have an instant business relationship with them, as you would do in your own country. It just doesn’t work like that.
Conducting business in China is not like doing business in Western culture. Being oblivious to this disparity is the most common mistake people make.
Relationship building in China is formed on the basis of Guanxi. It’s one of those foreign words that defy simple translation into English, and although it is often discussed, perhaps no business concept is more misunderstood when doing business in China.
Guanxi basically means preparing the way for a long lasting relationship. In business etiquette guides, guanxi is described as the Western concept of networking, but guanxi is far more pervasive in China than networking is in Western countries. A person you have good guanxi with will ensure your business relationship is strong and successful.
Once you establish your guanxi relationship with your end supplier, he will then work with his suppliers to make sure that they provide quality components for your product. Ultimately this ends up being like a chain of good friends all working together to achieve a common goal. If there is a problem with your production line, your end supplier will invariably sort the issue out quickly and efficiently. No prior relationship means your problem will not be a priority, and this can cause major delays in your supply chain. So, it is imperative to build the strongest relationship with your end supplier.
We will delve more deeply into guanxi and steps to create a good, long lasting relationship further into our Manufacturing in China 101 series