This is an excerpt from the first in a series of iPhone applications created by the International Herald Tribune to explain the culture and etiquette of major business centers. “Guanxi.” Westerners have embraced the term as the key to doing business in China. But there is no simple definition of the word or even agreement on whether it is becoming less important as China modernizes.
“The literal translation means relationships, but relationships can be defined in lots of different ways,” said Eric Olander, a media specialist with more than 20 years’ experience in China. Jack Leblanc, an author and business consultant, likens the term to “ ‘the old-boy network.’ That’s exactly the same thing.” But he also notes that like the generations of shared history and perspective that link the graduates of Oxford and Cambridge, guanxi is something that is built up slowly and carefully over the long term.
“It’s a very roundabout way of doing things,” said Christine Lu, chief executive of Affinity China, a luxury venture group. “I call it racking up guanxi points. Or if you look at it as a bank, you put a lot of deposits in, so that day you really need a withdrawal, it’s there.”
It is important to understand guanxi in terms of the Chinese mind-set, Mr. Olander said: “The Chinese have more experience with suffering than they do with prosperity. In the past 50 years, they’ve gone through a war and famine and drought and dislocation and economic revolution. They do not have the confidence as a society that tomorrow will be better than today.”
“Guanxi is this idea that relationships will protect you and insulate you from the variability of life, of a very difficult life in China,” he added. “So I tie guanxi relationships to that innate sense of survival.”
Hierarchies and decisions
The Chinese approach to hierarchy and regard for authority may be evident from your first moments in the country.
“If you arrive there, let’s say, as a part of a delegation of four or five people, and you’re met by your counterpart Chinese delegation at an airport or train station, it’s not uncommon for there to be multiple cars to pick people up and for everybody to be broken up based on your position or your influence — even for something as mundane as driving from an airport or a train station to the hotel,” said Saul Gitlin of Kang & Lee Advertising.
Most Westerners would expect everyone — from the president to a junior account executive — to pile into a van and make the trip together. But you should see the incident as an example of the Chinese respect for hierarchy; it will appear over and over during business negotiations.
“As classless as socialist China theoretically is supposed to be, it is still a very class-conscious culture,” Mr. Gitlin said.
“You have to be able to assess the power structure within the organization and understand, not only what the hierarchy is in terms of an organizational chart, but also what the hierarchies are in terms of relationships between people you’re meeting with, particularly the influencers,” he added. “A good case in point is, somebody who has a title, like a personal assistant or private secretary, which was an old political title in China, could be actually a very pivotal person, even in the face of other people in the organization who are carrying more lofty titles.”Tipping Tipping is not part of Chinese culture or tradition, but the Western custom has been spreading in recent years.
In Hong Kong, as in other major world cities, tipping is commonplace. But it often is hard for Westerners, especially Americans, to readjust their perception about what is an acceptable tip.
For example, porters usually are tipped anywhere from 2 to 5 Hong Kong dollars, or 26 to 64 cents, per bag — an amount that would be considered offensive in the United States. Most top-end restaurants automatically add 10 percent to the bill; any additional gratuity is at the diner’s discretion.
Taxi drivers expect you to round up fares to the next dollar. You can add on a bit more, but occasionally a driver from the mainland will surprise you by refusing the additional money. Tips are not expected for personal services, like help from a concierge, but they are welcome. In Shanghai and elsewhere in mainland China, tipping was banned by the government in the 1980s. Now the government’s Web site (www.gov.cn) says:
“Although officially prohibited, tipping is now widely accepted and expected by tour guides, hotel staff and tour bus or car drivers, in recognition of their good service. “In restaurants, if no tip is added to the bill, a 10 to 15 percent tip is advisable. “Books, music tapes and personal items, as well as money, are appropriate tips for guides and drivers.”
Interestingly, some bloggers have written about tipping in China (or, rather, the lack of it) in the past couple of years. And they have drawn comments from people who identify themselves as longtime China residents and urge visitors not to tip, saying the practice should not be encouraged.