January 27, 2021

The guanxi in the Asian market

The guanxi in the Asian market


The Asian market today is not an opportunity, but a reality although, everything is said, it is an enormously complex reality. The great majority of foreign investments in Asia – and among them, the Spanish ones – encounter major obstacles when they begin their journey, mainly due to ignorance of their culture. However, the surprising economic development in the last decades of countries like China reflects that the 21st century is undoubtedly the century of Asia.

China and the importance of guanxi as a central concept of its economy

Until becoming consolidated as the second largest economic power in the world, the evolution of China has gone a long way, but it has not been until relatively recently that it has stopped being a mainly rural society to become a technological and productive giant. Since 1980 China is the country with the highest economic growth in the world, and it is because of its potential that the eyes of entrepreneurs and entrepreneurs are focused on it within the Asian continent. For all this reality, the Chinese word guanxi has become part of the global financial jargon as a necessary resource for any type of project in Asia.

Guanxi is literally "a Chinese system of personal relationships reinforced by mutual favors that plays a fundamental role in conducting business and dealing with the state bureaucracy." But the concept goes further and involves creating a climate of mutual trust: in China, before any agreement, the important thing is that there is understanding between people, that there is friendship before business.

Guanxi birth

The cultural birth of Guanxi is located two thousand five hundred years ago, in the teachings of the philosopher and politician Confucius, which emphasized the interdependence of relationships as a fundamental social construction. The doctrine of this Chinese thinker has served as a guide for most of Chinese civilization. Different Asian countries such as Korea, Japan, Singapore and Taiwan, among others, share the inheritance of Confucianism, which means that Guanxi is not an exclusive phenomenon of China – for example, in Korea it is known as Kwankye and in Japan as Kankei. , although it is true that in the Chinese country its practice is more important than in the rest of the Asian continent.

With some 1,370 million inhabitants, China has become one of the main objectives of expansion and new destination of business projects at an international level. Cultivate a good guanxi is the first step to enter the market of the Asian giant, and by the idiosyncrasy of Chinese culture, a good network of contacts can guarantee success.

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