Networking is an important part of doing business anywhere. If you’re doing business in Taiwan, however, you may notice there’s a few differences in how they view business connections.
Guanxi is a Chinese term that is similar, but not identical, to networking in Western culture. It stems from Confucianism, which emphasizes the importance of relationships, trust and social harmony.
Successful business in Taiwan will rely on your understanding of guanxi, as it can open doors that are closed to other foreign competitors.
Friends for Life
Guanxi is more than just networking. It’s friendship.
In Western culture, business partners may spend a dinner together to discuss negotiations. Or they may play a round of squash.
But once that’s over and the deal is done, they shake hands and go their separate ways.
This is different from Taiwanese business culture, where relationships extend beyond work. Developing guanxi isn’t as simple as following someone on LinkedIn or attending one banquet in Tacoma.
Developing guanxi isn't as simple as following someone on LinkedIn or attending one banquet in Tacoma.
If someone has guanxi with an individual, they are obliged to do a favor or act on the individual’s behalf. Likewise, the individual must maintain guanxi by offering the same support.
This two-party agreement is why guanxi is considered a “social currency.”
If you ask for too many favors from your guanxi partner without offering much support back, you can exhaust your relationship.
Failing to “pay back” your guanxi partner is similar to owing them money. This is usually addressed by sending gifts to let them know that you’re sorry that you couldn’t honor the relationship, and that you still want to hold good guanxi with them.
Fraternities and sororities are the closest thing to guanxi that you can find in Western culture. And even then, they aren’t nearly as strict or influential as guanxi is.
Choosing the Right Friends
Networking in Western society is a relaxed affair.
You scroll through your LinkedIn friend suggestions, spot someone who you worked with three years ago, and add them as a friend.
Or you chat with someone on a flight to Los Angeles and exchange business cards just in case you expand your business.
Maybe these business relationships will amount to something. But most likely, they won’t.
Guanxi isn’t given to just anyone. Establishing this sort of relationship requires investment and dedication from both parties.
This is one of the main reasons why building personal relationships is so important in Asian and Arabic business cultures.
Guanxi is a business relationship where both parties should benefit. However, not knowing your partner makes it unclear what you can gain from the relationship.
Plus, it makes them vulnerable to “losing face” if the stranger ends up being dishonest.
This should be the takeaway: understanding guanxi is key to doing business in Taiwan. Before you land in Taiwan, you should throw away your Western understanding of networking.
Relationships are taken very seriously in Taiwan, often more than the business presentation itself. If you want long-term business success, you need to build, and honor, guanxi with Taiwanese business clients.
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