Anti-corruption compliance-minded companies understand the importance of linking an all-expenses paid trip to training and product demonstration, the use of logo-embossed knick-knacks to generate goodwill, and carefully verifying recipients of charitable donations to avoid issues with the Foreign Corrupt Practices Act (FCPA). But where does Chinese “Guanxi” fit in?
Many Chinese business relationships are backed by close personal relationships, sometimes referred to as “Guanxi” in Chinese. Building these networks of connections is critical for successfully doing business in China. But network access traditionally requires meals, entertainment, traditional gift-giving and, for some occasions, cash gifts before business even begins. All of which leads to a question some companies aren’t quite sure how to answer: Is it grease, gift, graft or Guanxi?
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