Guanxi - getting anything done in China
Trip Start
Jan 30, 2007
1
22
814
Trip End
Dec 31, 2011
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Lijiang,
China
Saturday, June 2, 2007
Known within the country itself as Zhonghua Remin Gongheguo, China is one of the few nations claiming to be communist or socialist.
The longer I stay in China, the more I am learning about how things are done here. And while on the surface - OK, just in name - China is communist or socialist, in reality it is extremely capitalist.
I am particularly interested in what is known as guanxi, or the art of social relations. Anyone who has visited China will no doubt see the high number of gatekeepers and security guards - protecting entry to everything from housing compounds, offices and banks to schools, hotels and even toilets. China is essentially a society of gatekeepers. And now, in the 21st century, it has developed into a society of gatekeepers and toll-keepers. In the new push for development, any scenic area or attraction is a prime target for this approach. Don't worry about putting any amenities or decent toilets. First, build a toll-gate. Then get some ticket-collector/guards, who will work long hours, always appear grumpy/tired/ambivalent, and will never say 'have a nice day'.
So in this socialist paradise which equally distributes the wealth and resources to all the people, how do people get things done? From the outside, the answer would have to be 'cunningly'.
You see the state-controlled system for ensuring equity is large, bureaucratic and unwieldy. In the cities, most are getting richer. In the country areas, most are very poor. The gaps between rich and poor are increasing. From the late 1970s when the Cultural Revolution ended and China moved away from the collectivised ownership and central control, it has become good to be 'capitalist roader'.
Because of the size, population density and vastness of China, it is normally hard to get anything done. Forms need to be filled out, permission granted, licenses obtained and approvals from the right authorities. The tardiness of officialdom applies to Chinese citizens - and foreigners living here too get an insight into the slow-turning wheels of bureaucracy when applying for driving licenses, extending visas, or posting a letter.
For some of the necessities and desirables of life, you can resort to the black market, bribery and forgery. But there's another way. Guanxixue literally means 'to pass the closed gate'. It is a network of social relations maintained for mutual interest and benefit.
As the Economist noted in 2000, "If you don't have the patience to learn about guanxi old boy, you might as well pack your bags and go home."
So what is this thing guanxi? Is it unique to China. Or is it just a fancy Oriental way of saying networking? Or a cover for bribery and corruption? And what does it tell us about human nature? Is it a demonstration of how people avoid the normal bureaucracies processes, or the triumph of human ingenuity and capitalism over the state?
To help answer these questions I found a useful explanation of the role of guanxi by two punters Standifird and Marshall:
Guanxi relationships can reduce uncertainty, lower search and other transaction costs, provide usable resources, and increase interpersonal pleasure and a sense of connectedness. They provide informal ways to reduce environmental uncertainty and opportunistic behavior. . . Guanxi networks are flexible, efficient, available, and custom tailored sources of social capital that are low in financial cost.
The book 'Gifts, favours and banquets' by Mayfair Mei-hui Yang explores this social phenomenon which subverts and challenges the state's control and power, by weaving a spider's web of obligation and indebtedness through the exchange of gifts and favours, and the osting of banquets. So pervasive is this way of getting things done, I have heard colleagues calculate how many drunken banquets are required for activities they wish to undertake.
To get things done here, you have to cultivate good relations with others. You have to weave a web of friends, associates, neighbours, officials, and gatekeepers. Because you never know when you might have to 'pull' one of those threads to get something you need. And one day you may be useful to someone else. Or have a contact which is useful to them.
One of the key elements about this reciprocal arrangement, is that when you incur a debt you usually don't repay it straight away. That would be foolish. It is better to wait and return the favour later on. Some debts can be called in five or six years down the track. Keeping the debt or credit alive is a good way of keeping the guanxi relationship alive.
Another feature of guanxi is that favours can go up and down the social hierarchy. A request from a worker or peasant could go via a cadre to an intellectual. Or vice versa.
A third feature is that you might repay someone else's debt, furthering the web of mutual advantage and obligation.
So where does this guanxi come from? Various scholar argue about its heritage. Some believe the process is as old as China itself, evolving in feudal times among blood relatives. Others see it as a 20th century phenomenon, noting how in the socialist idealism of the 1950s, guanxi declined, only to re-emerge during the Cultural Revolution, when cityfolk were sent to the countryside to work alongside peasants. Another theory, hinted at in official circles, is that guanxi was a Western import, which appeared after 1978 when China started to open up. This 'bourgeois individualism' was associated with the 'unhealthy spread of privitism'. According to this theory, guanxi is about using people, selfishness, bribery, deception, and corruption.
The third explanation for guanxi, that of a foreign evil, is still perpetuated by the CCP. This is kinda funny given each week yet another official is found out to be corrupt for pocketing the gains of guanxi.
In the first decade of the 21st century, guanxi is alive and well. While the ideals of a socialist utopia got beaten in the Cultural Revolution, guanxi seems just as important during this time of plenty as during the three decades of scarcity post-1949. Back then, it seems to have been a form of resistance against socialist collectivism. Now it seems a way of getting more, faster - in an age of great change and 'personal economic insecurities'.
Chinese officialdom still publicly regards guanxi as polluting 'deviant winds', remnants of feudal society fueled by outside influences. And the Chinese words for someone who is adept at using guanxi are like our English words 'greasy', and smooth.
Using the 'backdoor' seems to be standard practice to get things done. And the rituals associated with this seem well choreographed, with lots of over-the-top generosity, flattering and false modesty. It goes something like this:
You get introduced to someone, or you already know someone who may be able to help.
You then decide on an appropriate gift or favour. Wine or spirits such as Maotai, expensive or foreign cigarettes, and fancy cakes are the Big Three Gifts.Cash is also a suitable gift. Or invite them to a banquet or meal.
You then discreetly offer the gift or favour. They will of course initially refuse and be self-depeciating. 'Oh no. I don't need this.' Or 'there's no need to go to any trouble.'
Finally they will accept. 'You are so kind/polite'.
When it comes to banquets and meals, we Westerners are so confusing for Chinese. Why on earth would you go for a meal, and then 'Go Dutch' by dividing up the bill. In China, there are fights happening all over the country right now for the honour of paying the bill. People are pushing and shoving and jostling to pay. Why? Being the host puts others in debt to you. That is why is someone is hosting a meal they will be sure to keep your cup full and will downplay their 'humble meal'. And why you should be praising their tasty, sumptuous feast.
So who can be part of your guanxi network? Tactically speaking, start with your blood relatives and relations, your neighbours, and close friends, then extend to your co-workers, classmates and people you meet in business.
And what can you expect to get for all your greasing? In China, guanxi can get you better jobs, promotions, transfers, easier work tasks and days off. It will help get you better housing, the ability to move about to a bigger city, access for your children to the best schools and study abroad, access to better healthcare and hospitals, political security and better quality goods at a lower price. Yes, it almost sounds like a religion.
And in a way it is. As one guanxi practioner remarked, 'incense must be burned before every Buddha' - you must be prepared to offer something to every gatekeeper and toll-keeper. In the past when there was more surveillance, neighbour committees used old women to keep an eye on everything. They were known as the bound-footed KGB - xiao jiao ke-ge-bo. In recent times it was important to have good guanxi with high-ranking government officials, but interestingly, these days that is not as important for doing business. Instead the 'petty capitalists' are the ones to have good guanxi with. These are the new ties that bind.
In a tourist town like Lijiang, guanxi can get you cheap tickets to song and dance productions, discounts at eating places, and either licenses to operate businesses or the ability to sidestep regulations. I guess this is an illustration of how China is moving from a collective or group oriented society to a network-based society.
Now you can find heaps of books by Westerners and Chinese about how to acquire the right guanxi for business - or for naïve folk unable to cultivate, you can buy guanxi through an intermediary, saving you the time, but not the money.
I hope after reading this you will understand the importance of guanxi, and you will appreciate that is not just a case of giving gifts or cash, but also about being trustworthy and dependable. And that it is completely legal and not considered bribery - in most cases. Check with your accountant if necessary.
I'd better finish now, as my back needs scratching.
p.s. a week after a wrote this, I found an item on China Daily about guanxi being taken into the cyberage:
Guanxi website promises linksBy Cao Li (China Daily)
Updated: 2007-06-14 06:54
SHANGHAI: Guanxi, the Chinese word for those elusive but useful connections that could lead to personal or business gain, are just a click away thanks to a Shanghai-based website. Since its founding in March, Zhike.com has been seeking out the kind of connections that can help people enroll a child in the right primary school, get help from the government with business and even meet a celebrity - for a price. Several such requests have already been met. For example, one netizen offered 1,000 yuan ($130) for a photograph with Wang Xiaokun, the winner of the talent show My Show. Another netizen who was allegedly organizing an event with the celebrity said he could help. Chen Dufeng, the website's founder, said Zhike.com provides a platform for people to network and to match their guanxi with those who are in need. However, the website's front page adds the proviso that it definitely does not encourage the trading of power for money. Legal experts said they doubted that transactions like those offered on the website would lead to corruption, though some said having connections could be an advantage when looking for a job. Officials with the Shanghai industrial and commercial administrative bureau said they would keep an eye on the website. Ten of the 15 requests recently up for bidding on the website were in the category "looking for friends in government". Three of them were from people who wanted to be connected to teachers at either kindergartens or primary schools. One posted by the user "love5433" said his family had just moved to Shanghai and that he wanted to get his child into a good kindergarten. The post said finding the right kindergarten could be difficult, particularly for people from another province. He offered 1,000 yuan to whoever could help. A post from the user "mengfei" was seeking connections at the department responsible for medicine purchases at a hospital in Shenzhen, saying he wanted sell the hospital a particular medicine. The post offered 2,000 yuan for an introduction to someone at the department. Tang Xiaotian, a legal expert, said he was wary of efforts to transform connections into a type of social capital that could be traded. "What's more, this could lead to the trading of personal information," he was quoted by People's Daily as saying. Lawyers said the website would be held responsible if its services led to bribery. But Liu Ping, a human resource manager for a foreign-owned enterprise, said the company would consider good connections an advantage when recruiting new employees.
