China in 5 Words: Guanxi (关系)

Few activities are more indicative of social inequality than golf. It involves the smallest ball on the biggest pitch, land that could be used for housing, and – in a world struggling for fresh water – some courses require up to a million gallons per week to maintain.

Under Chairman Mao golf was banned in China as a decadent Western pastime. After Reform and Opening, China joined much of the world in embracing golf as a popular way for officials and businesspeople to establish relations, known in China as la guanxi.

Due to their environmental impact, the construction of new golf courses was forbidden in 2004, but for the next decade this was largely ignored, with courses increasing from 200 to over 600 before the government finally got serious about enforcing the new regulation a decade later. This coincided with Xi Jinping’s anti-corruption drive, which has sent large numbers of powerful people to jail.

As mentioned in part three of this series, going from the penthouse to the penitentiary was already common in China before Xi took office. In 2010, the country’s former richest man Huang Guangyu was sentenced to fourteen years in prison for insider trading and bribery.

Since Xi came to power in 2012, the targeting of high-level officials on corruption charges has reached unprecedented proportions. Last year Sun Zhengcai, former Party Chief of southwestern megacity Chongqing and once tipped as a possible future member of the Standing Committee, was sentenced to life in prison. His bribery offenses were punishable by death but a guilty plea and cooperation with investigators means he may live to a ripe old age but will die in jail.

Even more recently, top People’s Liberation Army General Fang Fenghui was sentenced to life in jail for bribery. The seriousness of what these people did, and the nefariousness of their intent differs on a case-by-case basis, but one thing is certain, nepotism is hardwired into all levels of the society.

Many of the golf courses that were constructed during the decade in which they were banned were built under the guise of being parks and other projects. The way to get away with this was to have the right guanxi (relations) with the relevant local officials.

Author Zhang Lijia recalls her family using guanxi to secure a much-coveted hospital bed for her struggling father: “Fortunately, a relative, a not so senior but well-connected official, managed to secure a private room at the hospital, which is reserved for ranking leaders. In return, the relative agreed to get the son of the hospital director into the most desirable school in Nanjing.”

Evidence of guanxi gone wrong often lies in the lifestyles of these now-disgraced officials. Many of them used their status to enjoy luxury brands and lifestyles, despite serving a political party that celebrates frugality. President Xi has called for a curb on official extravagance: No red carpet treatment, no luxury banquets and no fancy office buildings. But these are the symptoms not the root of the problem.

For centuries China has been an agrarian society and people are defined not so much by who they are but who they are associated with. As damaging as the use of guanxi can be, lacking it can condemn someone to life at the bottom rung of society. In 2016, Aeon published a documentary about the forgotten children of China’s prisoners.

Being outsiders struggling to establish the right relations puts foreign businesses at a disadvantage in The People’s Republic. As mentioned in the essay on “Didiao”, Confucianism emphasises harmony and filial piety. As mentioned in the essay on “Hello”, China is a society that has long kept outsiders at arm’s length.

Foreign businesses are learning the hard way the difficulty of establishing guanxi. Despite their best efforts, foreign businesses are being squeezed in China in favour of “indigenous innovation”. Mark Zuckerberg has repeatedly failed in The Middle Kingdom despite doing everything he can to establish guanxi.

Whenever he visits the country Zuckerberg, like most CEOs of major companies, is treated lavishly, but this falls short of having real guanxi. Failure to establish good guanxi may prove a blessing in disguise for many. The line between exercising good guanxi and criminality is often as slim as Mark Zuckerberg’s chances of succeeding in China.

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