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Business networking in China
Guanxi: a matter of time

For anyone wishing to do business at the international level, China is now a vital destination. This is why the Board of Trade devotes a significant portion of its international trade services to this country, organizing, for example, a panel and seminar on October 26 for business people interested in penetrating this market, whose potential is quite simply exceptional, and a mission is being prepared for February 24 to March 3, 2005 (tentative date).

The decision to export to China launches a remarkable adventure requiring careful preparation, where networking, as in so many endeavours, plays a decisive role. Anyone planning to do business in China must quickly add the word guanxi to their vocabulary. Translated literally as "relationship," guanxi is a tradition several centuries old.

Mutual dependence
Guanxi (pronounced guan-hsi) are networks woven between people and organizations: networks based on trust and developed over time.

Another Chinese expression summarizing the approach to networking in China is yi bu yi bu, or "step by step" -signifying that guanxis are continuous in nature and built one step at a time.

"Patience is the golden key when doing business in China," affirms Armand Rainville, the owner of Fraco, a company in St-Mathias-sur-Richelieu specialized in the manufacture of hydraulic work platforms. Present in China for four years now, Fraco has inked deals there valued at one million dollars this year. The company also has a branch in Beijing and a manufacturing facility in Shenyang, in northeast China.

Rainville, who travels to China at least three times a year, is well-versed in the rules of guanxi. "The person who introduces you into a network is responsible for you. They guarantee your reliability to the group. But before that happens, you must meet several times. There are potential clients in China that I've known for three years, and we're still nowhere near signing a contract. It takes a long time to build a relationship. You've first got to establish the human contact. But I accept that, and I enjoy it."

Accepting the habits and customs
Pierre Farah-Lajoie, a trade consultant whose company, PFL International, has an office in Tianjin, the country's third largest city, knows you must take time to develop good personal relationships with the Chinese and learn to understand and respect their habits and customs. These include ganbei, for example, meaning drinkers must consume every last drop of alcohol in their glass.

"More often than not, business is done over a meal," he explains. "Alcohol certainly plays a part, since it loosens tongues and reveals people's true nature. For the Chinese, it's a tool giving them insight into your real character and your ability to keep your composure."

"You've got to respect the codes," agrees Rainville. "You've got to play the game and not be stingy with compliments."

For the Chinese are a proud people, as Farah-Lajoie notes. "They have deep roots as merchants, and they want to do business. They want to become the world's greatest power, and they have no hang-ups about business. Once you're there, you've got to play the game."

Know the rules of the game
China's role as an emerging economic power is generating a lot of interest, and business prospects there offer extraordinary potential.

But to liberate this potential, you must take three essential steps: understand Chinese customs, demonstrate openness at the cultural level, and patiently cultivate the subtle art of guanxi.

For us Westerners, there is often a fine line between social conventions, delicacy, and bribery. Becoming an expert in guanxi therefore requires an in-depth understanding of the culture and ways of doing business in China and often a willingness to be in a situation where you feel indebted to someone else. In short, there is a multitude of opportunities to do business in China - if you know the rules of the game.

To learn more about the Board of Trade's networking activities in relation to international trade, we invite you to contact the services team at the World Trade Centre Montréal at (514) 871-4002 or 1-877-590-4040 (Canada only).