Guanxi

AAA

DEFINITION of 'Guanxi'

A Chinese term meaning "networks" or "connections," understood to be a network of relationships designed to provide support and cooperation among the parties involved in doing business. According to the Los Angeles Chinese Learning Center, by obtaining the right guanxi, organizations minimize the "risks, frustrations, and disappointments when doing business in China."

INVESTOPEDIA EXPLAINS 'Guanxi'

Guanxi is perhaps best understood by the old axiom, "it's not what you know, but who you know that's important."


In Chinese business, the mentality of "you scratch my back, I'll scratch yours" reigns, and favors are expected to be exchanged regularly and voluntarily.


Guanxi has become increasingly prominent in Western business circles and among academics studying community and social networks.

RELATED TERMS
  1. Kickback

    The payment of something of value to an individual with the goal ...
  2. Socionomics

    The study of the relationship between social mood and social ...
  3. Tiger Economy

    A nickname given to the economies of Southeast Asia. Some of ...
  4. Social Capital

    An economic idea that refers to the connections between individuals ...
  5. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  6. China Investment Corporation - ...

    A government-sponsored entity of the People's Republic of China ...
Related Articles
  1. Investing In China
    Investing Basics

    Investing In China

  2. Why China's Currency Tangos With The ...
    Forex Education

    Why China's Currency Tangos With The ...

  3. Top 6 Factors That Drive Investment ...
    Entrepreneurship

    Top 6 Factors That Drive Investment ...

  4. What is Globalization?
    Investing

    What is Globalization?

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center