“Is it legal, is it graft, bribery etc?” to the more belligerent;

“I’ve already paid a fair price, why do I need to do anything else?”

Ok, let’s look at it first.

 

It is actually called “Guanxi”[ gwanshee] and is strongly entrenched in Confucianism,

an inherent part of Chinese culture,  part of daily life that Chinese

take for granted.

However being a part of another culture doesn’t mean we cannot relate to it.

We have an underlying theme in expressions such as;

You scratch my back, and I'll scratch yours,

Money talks,

It’s not what you know, it's who you know.

Although not strong in our interpersonal culture, is a form of “currency” in China.

I will try to explain with a simple example of “Guanxi”

 

It’s a grey rainy day as you pull into the office car park.

Monday morning, running  late. 

You grab your case, lock the car, dash to the office.

A busy day, finishing later than most colleagues.

In you car, dusk, showery, turn the ignition, “chunk”

Lifting the bonnet, you peer in, you are a wiz with computers but know nothing

about motors, but you notice a dull orange glow on your trousers and realise you left the

headlights on all day.

One of your colleagues drives past, winds down the window and asks ;

”What’s the matter.?”

You explain; flat battery.

“No worries.” she says, “My husband has jumper leads in his car, I’ll call him.”

 20 minutes later he arrives, in a few moments your motor is running.

Ok, now a “relationship” has been established.

You owe him a favour.

Now of course, it isn’t really that cynical or calculated, as humans we, generally, like to

help each other.

This is a tenet also in  Confucianism

 

Back to the scene.

Noticing he has a computer on the back seat you ask if he has just bought it.

He replies it has stopped and  is on the way to the repair shop.

You know computers backwards, so you offer to help repair it, after all, he just saved

you a long wet walk.

The score is even.

That is something like Quanxi, a social currency that one uses to trade to get help.

Confucianism, without getting technical teaches society is a whole, holistic, and we

 work together to achieve a common aim.

Ok, much of that has been lost in today’s modern me me me selfish China but Guanxi

is still like a strong thread which holds the fabric of society together.

In many western cultures we too seem to have lost this "holistic" approach and are

more individualistic or competitive.

 

I did have problems trying to succinctly.explain this in an actual situation in China,

Then 3 months ago the idea hit me.

Well actually it was a bike that hit me as I was crossing the road, breaking my pelvis and hip,

landing me in hospital for 6 weeks.

So let's follow my progress from the moment the ambulance arrives, and see how

Guanxi was used.

 

The ambulance took me to the nearest hospital, a city unit, ok for small things but ill equipped

to handle emergencies as the first round of x-rays and tests showed mine to be, or so

they said.

They wanted to transfer me to a larger hospital  set up to handle “foreigners” who by

and large are still viewed as walking banks,still holding Eurocentric ideas about superior heakth services

back home, paranoid and foolish enough to pay over the odds.

This was also the most expensive  in Beijing,  by “trading” me to them, the local hospital

was establishing “Guanxi” in that they were now “owed” a favour from the big hospital.

Not being totally sure of the hospitals motives, or diagnosis, I called friend who was a nurse.

Luckily, she was a friend of the hospital matron, who confirmed my injuries, but denied they

could not perform the operation.

She promised to talk to management, who finally admitted it was a tricky job and didn’t want

it to go wrong on a “foreigner’, not good PR!

Ok, I am in marketing so I can relate to that.

 

My friend had used her connections with the head nurse to get information, [sometimes a costly 

and secretive item in China] and I had used my “relationships” to get what i wanted to know.

However, I now needed to find a hospital that could and would help me, without charging

the proverbial.

My friend called several who all declined, for various reasons.

We needed a relationship, and it came in the form of a previous landlord who was a doctor.

A call to him, yes, his hospital was a specialist in “bone treatment” he would speak to some

one and  use his relationship or “connections” to get a surgeon to work on me.

 

And so it came to pass, I ended up in a private ward of a specialsit bone hospital with one of

the city's best surgeons all at a reasonable price.

Now, it is important to note here that this hospital was one who earlier had refused me.

Guanxi or connections were at work like an invisible currency, and I was now in debt.

The following Monday was cleaning day, fresh sheets and ward inspections.

One of the senior sisters, not impressed with my clutter around my bed, proceeded to put it

all in my locker, presumably explaining I could ask for what I wanted.

This was looking like it might be a less than pleasant 6 or so weeks stay.

 

Later, as is the custom with all new patients, the head nurse dropped in,  exchanged a few words of

English, explaining to  my visitor  she was happy I was here because she loved English and wanted

to talk to me when I was stronger.

Hmmmmm, I could see an opportunity here.

Later that week I started to write some simple expressions and dialogue that nurses would

use, and gave it to one of the nurses to gve to her.

Every few days I would write another page and then the head nurse began to come and

check on me personally every morning.

I had developed a “relationship” and was in credit!

Sure enough as the week wore on the rules about my clutter were relaxed and I also enjoyed

other special favours. But it hasn’t quite ended.

 

A few weeks after I was settled into the hospital, my friend took the landlord to dinner and

gave him a small gift, now the scores were a little more even.

We can also contact him again if, God forbid, we need, and he can also feel free to ask

something of me at some future time.

Later my friend took the surgeon and  two other doctors who worked on me to dinner,

same reason.

When I can walk I will meet the nurses, spend  time helping them learn English and buy them

lunch as a "thank you."

I also have a "standing" [joke] invitation to join the surgeon in social activities when I am fit,

so I have now added another influential person to my list of friends who can call on me and on

whom I can also call.

 

This is strategic for my business as he is a ranking Communist Party Member and Wordperfect is

heavily involved  in the medical industry.

Are you following me? 

In other words,

               Quanxi is an investment in the future, you may not need it today, but

                 it could come  in handy  later, either directly to you, or as a form of

                "currency" when you trade it to somone else.

 

So I hope this goes some way to explain how “Relationships” or Connections” works on a

daily basis in China, clears up any misgivings you may have and maybe now you can see

more clearly how and why it also works in business dealings.

Unless you are secretly slipping huge amounts of US currency into a minister's or director's

bank account, mostly it is a harmless and accepted practice.

And, to be frank and realistic, if you are serious about doing business in China, then you need

to accept Guanxi as a part of  your way of life.

You can get by without it, but I would suggest you practice climbing My Everest in a Tee shirt

and sneakers as a warm up first.

Back to BTI services

  

Flash back to Chinese New Year

Sunday, 1. April 2007, 13:14:59
Unless you are a hermit, you will know that this is the year of the pig, ending the year

of the dog. Hard to imagine it was only 5 weeks ago we were counting down to the

Chinese New Year, and the start of Spring Festival.

During the lead up to the Lunar New Year Eve the air was split with sporadic burst of fireworks but at year’s end celebrations began to take a serious turn. What was, a few hours earlier, an occasional bang, developed, as darkness fell, into a deep incessant

rumble, much like being up close and person with a never ending, high speed express

train as millions of Beijingers began a simultaneous assault on the old year.

This was punctuated with regular explosions as, closer to home, fireworks exploded

with ear splitting sound of incoming mortars, illuminating the inky blue sky with flashes

of colour.
A cacophony of not just sight and sound but also smell as cordite filled the air.
It continued till about 1 or 2 am building to an enormous climax at midnight when,

even behind closed, double glazed windows and 8 to 10 inch thick concrete walls it

was difficult hold a normal conversation.
That night was one of the best I have ever seen, not just because I was in the CBD

and there is more money there, nor because the standard of living in China has

increased dramatically so there is a greater discretionary dollar generally, but largely because the Beijing government has completely relaxed laws on fireworks in the city.
Until this year it was only legal in provinces and rural suburbs of Beijing.

What is big enough to contain a small European city?
The answer is a Chinese supermarket, although the word super is a bit of misnomer,

I can’t really say hypermart because they are many times bigger
A week before Spring Festival I visited my local supermarket, not a lot had changed

apart from the festive decorations.
A few days before it was festooned with tress, angels, Santas and other Christmasy

things.
Lunar New Years Eve, I returned only to find I was sharing this once was vastness

with 87% of Beijing, and it suddenly seemed a lot less vast!

Of course, like most cultures, there are many myths and legends abounding, one is

that it is bad luck to wash or cut ones hair at this time, but few believe it.
Unless you are a supermarket!
What was the previous week, a goodly sized area stocked with maybe 20 or more

different brands of shampoo, had been shrunk to just a few shelves and the space

taken over by pallets stacked high with Pepsi, Coke Sprite and more brands and

flavours of soft and fruit drink than one could shake a straw at.
Now many people will tell you Chinese don’t have a sweet tooth or eat chocolate.

Another “myth”
My local Carrefour’s always has a good chocolate selection but that day it too had

been expanded rivalling the entire floor area of some mid sized supermarkets, with

Cadbury and Dove leading the charge, tempting shoppers with packaging resembling

all manner of traditionally lucky Chinese symbols, complete with pretty girls, equally tempting, offering free tasting…….. of chocolate!
Other imported brands from Switzerland, France, Germany and Russia were also

vying for the customer’s attention. Imported chocolate is a “luxury’ brand here, a

fiercely fought battle often with “promotional” items.
Not then, one paid top price.
Another section doing good business was the alcohol, in particular the attractively gift

boxed sets of Chinese liquor. Each box a masterpiece of art in itself.
In this department it is definitely the gift and the cost that counts, NOT the thought.

Usually this store has massive aisles something akin to a 4 or 6 trolley highway, but

again, space was paramount, and extra tables had spring up in the rows, groaning

under the weight of dried fruit and sweets, again in beautifully boxed sets, nuts and

other Chinese traditional delicacies. Seems sacrilege to even open them, much less eat.
All these were strategically positioned at the foot of the elevator from the 3rd floor

to entrap shoppers as they descended, again with pretty girls dressed in long white

boots, shiny short skirts, and headsets proclaiming [loudly] the benefits of what they

 had to offer.
The carefully orchestrated bottleneck of trolleys and shoppers ensured the message

gets across loud and clear and if one paused long enough within striking distance of

one of the tables, which was unavoidable, one was all but force fed small samples on toothpicks.

Moving deeper into the bowels of the market, one comes to the butchery, again on a

vast scale offering both pre-package and a semi butchered while you wait service.
Whilst the modern, western style supermarket is now an accepted part of life, some traditions still cling, such as the Asian preference for meat, fish chicken as fresh as

possible, if not still alive, then at least being freshly butchered in view.
The pre packaged, frozen, polystyrene, glad wrapped morsels that we so value are

less popular here.
Whilst a throng of shoppers and trolleys some 3 or 4 deep jostled to select and have

their meat chopped, weighed and priced one can hear the steady rhythmic shchunk, shchunk, shchunk, from out the back as cleaver met chopping block via bone and flesh.
It maybe the year of the pig and lucky, but that day was definitely not so lucky for a

pig, or a chicken for that matter.
This is not a place for the timid or first time Western visitor, hanging back waiting for

ones turn will result in starvation, a certain amount of assertion is called for here.

When I first came to North East China, markets were different in that as one waited

for ones meat, the shchunk, schunk, shchunk was preceded by another sound, as

from behind a strategically place bamboo screen oozing blood and feathers onto the sawdust floor, another hen realised, too late, she should have bought a return ticket.
Squawk, shchunk, squawk, schunk!

Moving further round into the bakery resulted in yet another surprise change.
Most of the Western style bread had been replaced by Chinese [yes, there IS a

difference.]
A good business move as most of the punters were buying up the fresh baked

traditional Chinese cakes or patisseries much as their ancestors would have thousands

of years ago.

Another custom is to buy bowls at this time, a new bowl at new year signifies good luck, the bigger the bowl, the bigger the luck....... I guess.
Well, superstition aside, it just so happened we needed a couple of new bowls,… true!
Having shopped around during the previous weeks I had decided that given the range

and prices, my supermarket offered best value for money.
Surprise!
What was, a few day earlier, an abundantly stocked china department was now down

to almost bare bones as people were loading up their carts with all manner of crockery,

 boxed and lose.
Seems that is one tradition which is taken seriously.

Having made my selection from the imported crystal, a less popular department, I

continued down back past the chocolate girls and their tempting tasty wares.
Some time later I decided that maybe I needed larger size bowls, but returning to the

3rd floor I was astonished to see that where there had been several hundred, there

was now just a few.
This was the scene in many aisles, it was as if a huge swarm of locusts had descended picking the place clean as staff worked feverously to restock.

With so many shoppers and so little available floor space one would expect shopping

cart mayhem, but the store had thought of that in advance, several dozen young men,

 in uniform with white gloves were strategically positioned to ensure that east moving

sea of shoppers stayed left and west moving tide stayed, errrr the other side.
But like supermarkets internationally it all comes to a head at check out where long

queues await.
Chinese have this irritating habit of lining up horizontally, and rumour has it that

queue jumping will be one of the new additions at the 2008 Beijing Olympics so it is important to again be assertive and stake and maintain ones place in the line.
But spare a thought for the poor check out girl, who has for her entire shift been

head down, t’other end up and what little eye contact she makes is to dare you to

change your mind or run out of money with a look that would make Clint Eastwood

turn tail.
Luckily most supermarkets accept credit cards so the pain is forestalled.
Whiling away my time in the queue I started to note the tally of my fellow shoppers,

 on average it seems most shopping bills came to around 500 to 700 CNY, some

double that. Later on the evening news I saw that supermarkets had experienced a

5 times increase on last years sales.

How is this relative to business you ask?
Well, I do a lot of reading and it saddens me that a lot of what I read about China

overseas is quite negative, often taken 2nd or 3rd hand from other sources, who may

or may not have even been here. Doesn’t really inspire business confidence.
So this brief look at 2 aspects of the Chinese New Year is intended to highlight in a light hearted way, the positive aspect, the growing spending power of this nation that it

seems, from where I sit, too many non Chinese still look down on and regard as a poor nation, and, in my mind, in doing so miss a good opportunity.

Anyway, I wish you a belated Happy Year of the Pig, which incidentally, is an auspicious year as it is deemed to be extremely lucky in the Chinese astrological calendar.
Don’t believe in that?
You don’t need to, there are 1.4 million potential customers who do and THAT’S all

you need to think about!!

COMING NEXT MONTH........Why business options in the provinces make sense!!