Guanxi – The Nail Gun of Culture

Guanxi is useful in the right hands, deadly if mishandled – and not to be played with.

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Let’s put the guanxi controversy to rest, once and for all. Half the people who know what  guanxi is roll their eyes and accuse anyone who says the word of being a scammer, a sucker or tool of the worldwide Chinese conspiracy. The other half say that it is the only way to get things done in China (or Asia, or Anywhere)  —  if you don’t start and end every Chinese interaction with good relations as your single highest priority, then you are doomed.

The truth is in the middle … of the power tool section.

In fact, guanxi is the international negotiation version of the pneumatic nail gun. In the hands of the right person working with the right materials under specific circumstances, it can create a lasting bond. But if you mishandle a nail gun, it will ruin your day and wreak havoc on everything around you. In China there are nail guns everywhere. Just because you don’t know how to use them doesn’t mean you can ignore them, take them lightly – or hire someone to fix every problem you have with his own nail gun.

In other words, just because guanxi and personal relations rarely help American negotiators in China doesn’t mean that you should ignore the importance or deny the existence of a significant cultural phenomenon. Guanxi is real, it’s not going away, and Chinese take it seriously.

Rules for  guanxi – the nail gun of culture

1. Useful in the hands of the right person under the right circumstances.
2. Appropriate for some jobs (heavy construction) but not for others (watch repair).
3. Just because you don’t like nail guns doesn’t mean you can ignore them or mishandle them if they are around you – and in China the guanxi nail guns are all around.

Telling a western client negotiating in China to ignore guanxi because it is troublesome and hard to understand makes about as much sense as a Chinese consultant telling a Beijing client to ignore financial due diligence in the US because it is troublesome and hard to understand.

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