Trusted relationships, China

Guanxi (pronounced gwaan-she ) means, basically, trusted relationships. Anyone who has had even limited dealings with China knows this term. While personal relationships are very important for business worldwide, they tend to be high art in Asia, and in China have... 

In building a presence in Asia, personal relationships, trust, and respect are critical. BASF and Shell are good examples of companies that have understood the importance of having the same executives based in China for many years. 

Trust-based relationships are still very important for doing business in China. They open doors and influence decisions a contract may be worth only as much as the relationship behind it. 

The aim of this research is to study if the Chinese cultural and social embedded guanxi networks are important in business practices and how they influence buyer-seller relationships and performances in vegetable supply chains in China. We interviewed 8 case companies to explore their guanxi network, trust, transaction specific investments, channel and governance choices and performance attributes of transaction costs and quality satisfaction. Summaries of the 9 selected buyer-seller relationships (relationship 1-9 in Figure 2-6) for each case company are listed in Table 2. 

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