Guanxi

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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.

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