Building personal relationships in Asia as a series of interlocking circles. Immediate family members make up the first circle, then extended family members, then people from the same town or neighbourhood.
Since non-Chinese have no guanxi networks in China, they are not part of these inner circles therfore, it may be more challenging to build relationships or connections with the Chinese. The most they can hope for is to become a ‘foreign friend’. This same applies to business people entering other Asia markets like Japan, South Korea, Thailand, Malaysia or Indonesia.
As a ‘foreign friend’ , you still cannot afford to ignore the guanxi/networking system. It is a prerequisite of doing business in Asia. In many cases, networking is the only way to achieve real business success and therefore has to be approached with commitment and careful steps.
“Guanxi”(relationships) is a bond of trust and understanding between two individuals that provides the key to networks of professional ‘connections’ (the literal meaning of the word in Chinese) and contacts. In order to obtain the key, you have to recognise that the system is built on obligations and favours that play an informal but essential role in Chinese and Asian business.
It is at times challenging to explain to Westerners that Asian business deals are often more based on relationships than on contracts or actual transactions. For the Westerner, a personal relationship may build up over time in an organic way but the important issue is to sign a contract as the first stage towards completing other possible contracts.
However, exactly the opposite applies in Asia. Only after the process of “guanxi”or network building has taken its course and strong personal relationships are achieved. then your Asian party will progress forward to consider a commercial transaction with you.
In other words, the rulebook about not mixing business with pleasure or the personal has to be thrown out of the window. The route to a profitable business relationship in China – and in Asia – is usually approached from the opposite direction.
For the Western business person seeking to launch or expand business into Asia, the fastsest grwoing region in the world for the next few decades, master the art and related communication strategies on how to build guanxi is not only important to your business. This is a “Must Do STRATEGY” as it is YOUR BUSINESS so that you can build highly effective and lucrative long term business relationships with your Chinese and other Asian counterparts. That’s the Secret Key into Asia.