When doing business in China, there are a couple of concepts worth noting that are extremely prevalent in Chinese culture. The first is guānxi, which is the art of building relationships. You will find after initially establishing contacts with people, that they will often go out of their way to help and provide you with whatever assistance you may need. This assistance forms a bond between people, which forms the basis for future relationships. Later, when ready to do business, it is common to use the network of relationships created from this process to begin.
These relationships are meant to be of mutual benefit and are useful for generating new business and clients, or as a source of knowledge and expertise. Examples may include one person getting another a job at his company, or a principal allowing someone's child entrance into a prestigious school. While this concept may seem obvious and isn't unique to Chinese culture, it's certainly more prevalent in Chinese society and has ingrained itself as part of daily life. Indeed the expression méi guānxi, which is used to say "That's okay" in response to an apology, is one of the most common phrases you might hear. The literal meaning can be thought of as meaning "this doesn't affect our relationship."
Closely related to guānxi is miànzi which is the concept of "face." Many business relationships begin by doing personal favors for each other. The person doing the favor gains face or status in the process, while the recipient has an implied obligation to return the favor at some point. Meeting these obligations allows you to build up your network of relationships by gaining face. Choosing not to help when given the opportunity to do so, creates the opposite effect, resulting in your losing face, which should be avoided at all costs.
While it is important to do your best to accumulate as much face and the resulting prestige accorded with it as you can, it is equally important not to put others in positions where they are forced to lose face. Examples of such include trying to embarrass others in public, or putting people in positions where they have no solutions. In such situations, it is best to give the other party a "face saving option" which in turn builds your character for having accorded them that respect. For example, choosing not to accept a dinner invitation should be accompanied with a suitable excuse (along with the requisite apology) that shows your interest in the other party, allowing them to keep face.
Knowledge of these concepts is important not only in business, but also in daily life in China. Unlike the West, where you might make a public scene to get what you want, doing so in China will ostracize you, resulting in the opposite effect. While the Chinese are increasingly more tolerant of Western mannerisms and traditions, respect of local etiquette is a great way to stand out from the crowd, by showing your willingness to do things their way.
