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. India Is Eclipsing China's Economy As ...
    Economics

    India Is Eclipsing China's Economy As ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center