To know China, you must know “guanxi.” Lexically, it is a relationship or connection, but it means more than that. It contains important cultural implications that no single English word can explain.

In China, guanxi is the key to success, be it in business, politics or any field that requires people-to-people relationships. The Chinese understand guanxi as the art of networking in their own fashion. To them, guanxi is exchanging favors for a common interest. “If you scratch my back, maybe I will scratch yours.”

“If you approach guanxi from a business or technical perspective in a matter-of-fact manner, you will soon hit a limit. The basic tenet of guanxi is being truthful to others. You have to stick to it,” said Kim Man-ki, author of a guide book for those who plan to do business in China, “Mr. Hong Becomes a China Genius.” 

The book is the latest part of the “Mr. Hong” series published by Dasan Books. The series deals with various topics through storytelling for beginners. It is essentially a Korean version of the U.S. “For Dummies Series.” The “Mr. Hong” series is divided into 18 topics including accounting, the Japanese, golf and dating.

The author weaves his 20 years of study and business in China into “Mr. Hong Becomes a China Genius,” in which Mr. Hong, an MBA graduate from the U.S., tries to do business in China.

The book consists of two volumes.

The first volume describes how Hong steps into the Chinese business community and what he experiences in adapting to its culture, as well as providing tips on how to start a business. The second volume tells the story of what Hong undergoes in expanding his coffee business in China.

The author advises readers to respect and understand Chinese people and their culture.

“For most Chinese people, building a close friendship comes first, then they talk about business,” said Kim. “But many Koreans tend to push the notorious ‘ppali ppali’ (Korean word for quickly, quickly) when entering into a business relationship with Chinese people. This often leads to an early failure. Keep in mind that Chinese people enjoy taking things slowly and carefully, especially in forming guanxi.”

Kim says that guanxi comes in two kinds: shallow guanxi and deep guanxi.

“Acquiring a business license or permission is simple shallow guanxi,” the book says. “In order to do business properly, deep guanxi is crucial. Guanxi does not develop in a single day or over a glass of alcohol.”

In 1992 when China and South Korea established diplomatic ties, the author left for Beijing as the first Korean student to study at Peking University. He received a master’s degree from the London School of Economics and a Ph.D. on Chinese economy from Hankuk University of Foreign Studies in Korea. He currently heads an investment company in Liaoning, China and teaches at Sookmyung Women’s University.

“Forming good guanxi is not easy. But once you form strong guanxi, that connection will lead to another. That’s the way you do business in China,” Kim said in the book.

“Mr. Hong Becomes a China Genius,” will help readers understand the unique culture centered on guanxi and business dynamics in China.

By Ahn Sung-mi (sahn@heraldcorp.com)