Guanxi has a great influence on Chinese business. That is why it is very important as a Westerner to be aware of what Chinese networking involves, because you will undoubtedly have to deal with it.
But… what exactly is Guanxi?
Guanxi is a term often used to describe the Chinese way of networking. In China you build up guanxi. As a result, you strengthen the bond between both business and family, friendly relationships. Unlike in the West, no distinction is made between business and private life. It refers to a mutual, mutually shared obligation, to the extent to which you grant things to each other. Without guanxi or favours, you are nowhere. For example, failing to return favor is considered an unforgivable offense for Chinese people. The more favors you ask of someone, the more you owe that person.
Understanding this way of networking is extremely important when you do business with China because it is elementary in building a network of trust. As a European entrepreneur you also build guanxi and you are also, usually tacitly, expected to follow the rules and play the game.