China Law Blog on the importance of guanxi for doing business in China today:
Guanxi relationships is a much talked about, much written about subject. How big of a role does it really play?
Shockingly little. I have met many people who have real power in China but virtually none of them really do rely on their relationships with people to take care of business. Our lead China lawyer, Steve Dickinson, has been living in China and doing business there about half his life. His spoken and written Mandarin are better than your average educated Chinese person. Steve knows a ton of people in China, yet he would never claim to have pull there nor would he ever advocate taking a shortcut because of pull. I cannot tell you how many times I have heard of or seen a Western company believe it did not need to follow the rules because it had sufficient pull to get away with doing things outside of the lines, only to face major issues for having operated outside of the law. The problem with guanxi is that there is always going to be someone higher up than your contact and that person higher up may at some point call you to account for your failure to follow the laws to the letter. Also, and I have seen this happen more times than I can count, your contact may be removed and then the person who takes your contacts place may remove you as an example of how things will operate under the new regime.
via The Basics On Doing Business In China. : China Law Blog : China Law for Business.
Tags: China, China Law Blog, Economics, Guanxi
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