Gaunxi literally means relationships , although in business setting it can be better understood as connections. Guanxi has its roots in Confucian philosophy of valuing social hierarchy and reciprocal obligations. Confucian ideology has a 2000 year old history in china. Confucianism stresses the importance of relationships, both within the family and between master and servant. Confucian ideology teaches that people are created equal .In Confucian thought ,loyalty , with its related obligations to ones superiors, is regarded as a scared duty, but at the same time, this loyalty has its price. Social superiors are obligated to reward the loyalty of their social inferior by bestowing “blessing” upon them; thus ,the obligations are reciprocal.
Today Chinese will often cultivate a guanxiwang , or “Relationship network” for help. Reciprocal obligations are the glue that holds such networks together .If those obligations are not met if favours done are not paid back or reciprocated the reputation of the transgressor is tarnished , and she or he will be less able to draw on his or her Guanxiwang for help in future. Thus the implicit threat of social sanctions is often sufficient to ensure that favors are repaid, obligations are met, and relationships are honored. In society that lacks a strong rule based legal tradition , and thus legal ways of redressing wrongs such as violations of business agreements, guanxi is an important mechanism for building long term business relationships and getting business done in china. Ther is a tacit acknowledgement that if you have the right Guanxi legal rules can be broken or at least bent. Mintz who is now fluent in Mandarin ,cultivated his Guanxiwang by going into business with two young Chinese who had connections , Bing Wu and Peter Xiaxo.