Building Relationships:

"Business is all about relationships," say many executives. This is even truer in China. The word "guanxi" in Chinese means "relationship," but it also a concept or a philosophy.

If you have "guanxi," you are fortunate enough to have a strong network of contacts. These contacts are often much richer than what is considered a contact in the West. Rather than just knowing some cursory information, a contact in China is often bound to you by personal obligation. In other words, they owe you one. The value in the contacts lies in the ability to call in these favors.

Building relationships in China takes time. It takes place over the course of years, not days or months. To develop "guanxi" one must provide at least as many favors as you accept.
In the United States, the Sarbanes-Oxley Act of 2002 was a reaction to many corporate accounting scandals including Enron. The legislation also set new standards for appropriate business gifts. Yet in China, gift giving is still widely accepted in the business world. However, it is illegal to give gifts to a government official. Gifts are a great way to build "guanxi."

Gifts given in China though must take into account local customs. Gift must strike a balance between being too frugal or too extravagant. If a gift is too frugal, you will be seen as someone that does not value the relationship. Gifts that are too extravagant may cause the receiver to feel obliged to reciprocate. Don't hesitate to ask the receiver what they would like. And expect them to do the same. Gifts should not be given in quantities of four, since that number signifies death. The number eight is lucky though. Business gifts should typically not be given in private, while personal gifts are often given privately.

Don't be surprised if your gift is not opened right away. Opening a gift too quickly is a sign of greed. The receiver may also decline your gift three times before accepting. Accepting a gift too quickly can also signify greed.

Colors in China often have many meanings. These meanings may even change from region to region. So it is important to be careful when wrapping your gift. Red is typically the safest color. A good trick is to have the gift wrapped at the store.

Gift
Good Gifts
Cognac
Banquet
Fine Pen
Calculator
Kitchen Appliance
Lighter
Handicrafts from Home
Illustrated Books
Fruit/Candy - for a group

Bad Gifts
Clocks
Cut Flowers
White Linen/Tablecloth
Knives
Scissors
Storks or Cranes
Blue or Black items