Guanxi
en.wikipedia.org
en.wikipedia.org
In general in big cities "guanxi" plays a smaller role, while in small cities especially the underdeveloped ones it plays a bigger role, to the extent that even doing some fairly trivial business (or even things like getting a passport or going to hospital) needs you to have some "guanxi". By "needs one to have some 'guanxi'" I mean it's not impossible for one to do without "guanxi" but it's just way smoother and faster if you know someone who can help. That's also one of the reasons people prefer to live in big cities. It's just more fair for young people without acquaintances in every possible field. On the other hand, parents are more familiar with "guanxi".
The existence of "guanxi" also makes people doubt if they have failed to lubricate some "guanxi" if they got rejected or failed for something (e.g. U.S. visa, or a reasonable exam) even if there are other reasons more likely to cause it.
"guanxi" sometimes even helps one to pass the test for driver's license, oh a big facepalm to road security...
(What I said above is not to confuse you guys, the wikipedia page is still worth reading though.)
It has a lot in common with corruption but in a communist state it is the norm. Because communism fails at selecting performance, nothing really works and the state institutions are the first affected, but it spreads eventually in the whole society. Thus, the only way to get something is as a favor from someone. You don't go to the institution but you go to someone who "works" there.
So another way to describe these guanxi is : networks of influence with favors as money.
I'm always amused when people project a Western-centric viewpoint when talking about China. This has very little to do with Communism and everything to do with China's own history and cultural development.
Chinese culture has always placed a strong emphasis on interpersonal relationships because institutions besides the state have always been relatively weak, and the agents of the state formed a close-knit, elite class that interacted with one another personally.
For over two thousand years, the state bureaucracy has been the strongest institution in China at the local levels. Even during the Nationalist period and in pre-modern times, you'd better believe the average person would a good relationship with their local official if they wanted to get anything done effectively.
Controlling nepotism and corruption within the bureaucracy has been a perennial concern during every single dynasty of China, going all the way to the Qin dynasty in 200 B.C.
Also, you definitely need good interpersonal networks to do business effectively in Singapore, Hong Kong, or Taiwan, despite the fact that none of those polities have experienced direct Communist rule.
The Communists in China were actually markedly less corrupt than the Nationalist officials they replaced, and in fact the corruption of the Nationalist administration was one reason they lost the Civil War.
Remember that China was still basically a pre-industrial nation in 1949 -- it's hard to have impartial, clean institutions in a nation of China's size without modern communications and mass culture.
I'm pretty sure Romania was a more modern place than China was before WW2, so imposing a Communist system was a step backwards, but that doesn't generalize to China's experience.
So yes, Romanian experience is very relatable to this aspect of China.
[*] i.e. which unobtainable food items are coveted most.
The funny thing is that all communist countries used to be very bureaucratic; however Max Weber says that there is a blessing in bureaucracy - it is supposed to be impersonal, so in theory it should be objective and be able to ignore personal biases/preferences, provided that you just stick to the procedures. Now Guanxi seems to take the better of that theory.
> Max Weber says that there is a blessing of bureaucracy - it is supposed to be impersonal, so in theory it should be objective and just ignore personal biases/preferences provided that you stick to the procedures.
Oddly enough it was bureaucracy that was cementing life order in socialist bloc in identical way, and Guanxi/personal corruption is a manifestation of it. This really stems as consequence of implementation of Marxist tenets and I maintain is deterministic and unavoidable. It seems many can't really comprehend how big a footprint Communist effort leaves after its gone. Historic and cultural continuity is typically destroyed or at least mauled. All ex-communist countries have shared experience in the same way all rape victims regardless background have it.
My father would strongly disagree. Communists paid for his education from elementary school and up to college, and made sure he didn't end up doing small scale agriculture like his parents and grandparents.
Before 1940 Romania did have some industry, capital and civilization, true. But if counted by either population or area, a supermajority was simply subsistence agriculture. Communists razed it down, built industry and mechanized agriculture in its place, and crammed people into cities and towns. I'd guess that up to the early 70s it was actually a force for progress, even if only for breaking up old power structures.
After that it was the usual trade-off - less appliances, electronics and luxury goods, but a more relaxed and secure life style. Until 1980, when rumor has it that Ceausescu visited North Korea and fell in love with it. After that things changed, he pushed strongly for full debt payment, and the population suffered.
At least for me, it's more like a communist thing with Chinese flavor than a Chinese thing with communism flavor.
Actually it is more complicated than it appears. As you can see, the whole urbanization process of China happens after communist took power. Many rules in the cities are new, and it's hard to say that the rules take places because of Chinese culture or because of communism, usually both.
One thing that is certainly communism-related is that, because of planned economy and a very restricted market, some very basic things were on a shortage and you need "guanxi" for that. My mom recalls that 40 yrs ago ladies wanted to marry butchers (or the one who sells pork), just because they got more power due to the position they were on. You see Radu mentioned that people get extra half bread due to relations. My parents used to need ticket to buy rice and pork etc. That's where you need some "guanxi" to do basic things. Also, to go to hospitals one needs some "guanxi" because medical resources are limited (and price where controlled). Should it be a free market, private hospitals would be built and shortage would fall.
TL;DR: Because communist countries government grab so much power in their hands, "guanxi" plays a more important role than it used to be.
The importance of a relatively free market should never be underestimated. And Chinese people certainly needs a smaller government. Even today, the market is not as free as it could be and the government is still taking too much power (they made a lot of progress with that power though). It's a much bigger government than any democrats would imagine, bigger than a big government in American common sense!
For example in Thailand I see Guanxi all the time, granted that it's firmly in the Chinese sphere-of-influence. But I bet if you go to some Central America Bureaucracy and you'll see the same thing.
In communist societies this functional mechanism is quasi inexistent and the only thing that keeps that society running is the guanxi . China may have its specific form but I'd say that it is rooted in our deeper human pshichological traits that are common to all of us.
I live in an ex-communist state and we're still struggling with such a guanxi that trancends all major political parties and state institutions, after 26 years since we've "transitioned to democracy".
The major problem is that this close-knit, closed, state parasite is blocking any change and any advancement in society.
Actually, that happens in all sort of societies that are not Legal-Rational Liberal-Capitalist.
I'm not sure you got it right. Price discrimination and other market mechanisms existed, more or less, in communist societies too. The problem was that there was this seller's market. A lot of things were scarce, be it natural or artificial scarcity (a gatekeepers induced one), and besides the fact that the supplier could inflate the price a lot, you still had to have connections to have a chance to the bid. Excluding the communist idealistic selfless individuals that did their job as best as they could indiscriminately, the norm was for people to leverage their positions. For one, this way they created "markets" for their supplied services or access to goods. For another, this is how you get what you have or do to worth anything in the eyes of others. So this was besides the currency based market. It was a favor based market that overlapped the first.
You had the Church vying against various pre-modern states for political power, and in the shuffle there were also entire towns and regions that had de facto autonomy, as well as guilds and other medieval institutions that were allowed to mind their own business.
In that vigorous competitive environment, you would expect that cleaner, less corrupt, and more transparent institutions would tend to survive. The way these institutions worked were aggressively copied across Europe, as nations vigorously competed with one another to modernize and survive.
In that framework, you would see Communism as a big step back -- instead of clean, independent institutions on the 'Western' model, just replace everything with the state.
China, on the other hand, was basically still a pre-modern state into the 20th century, and hadn't had non-corrupt institutions since the mid Qing dynasty. Pre-modern China had no large nationwide institutions except the state -- its communications technology lagged Europe's, and it also had a huge population.
Just over a hundred years ago, the de facto ruler of China, the Empress Dowager Cixi took all the funds earmarked for naval fleets and dumped into building a palace instead.
The Chinese Nationalists who eventually overthrew her in 1911 spent the next few decades failing to control endemic corruption at all levels of government. One of the reasons that the Nationalists lost the Chinese civil war was due to the deep dissatisfaction everyone had at their pervasive corruption.
In fact, corruption at the bottom rungs of the bureaucracy basically didn't exist under Mao and was aggressively weeded out--corrupt officials were regularly imprisoned and shot. For the average Chinese person, Communist rule, despite its own problems, was a large step forward in terms of quality of life and quality of governance.
TL;DR - Communism in Eastern Europe was probably a step back, but in China it was an improvement on what existed before. Guanxi is how things get done when you don't have strong institutions.
Totally agree.
I am saying that from a point on, guanxi is the reason you don't have strong institutions, precisely because they tend to form close-knit circles of power that prevent the forming of strong institutions. It's a vicious circle.
Although behaviours, expectations and social constructs vary, we're all human so most probably those of course are not unique to China, but they have a word for it. Like "zeitgeist", "amok", "bon vivant", "maelstrom" or "karma", some things are just untranslatable and warrant bringing the word-concept to other languages as is, crystallising something that certainly existed prior into something that suddenly acquires a more precise (or at the very least less diffuse) shape in the mind, that we can tie nuances to.
- In the west we usually identify distinct types of influence. We even have special words for particular kinds of influence. Nepotism, cronyism, old boys networks, etc. These identify particular types of connection and particular forms of influence. Friendship through a golf club or university hall would be a characteristic aspect of an old boys network, for example. In Finland, you might think of a 'sauna clique' business culture. Also, we think about these types of relationships independently. Someone might be proud of their 'old boy' connections but intolerant of nepotism, seeing one as earned and the other as given. In contrast, guanxi is more of a melting pot. It could mean a lot of things. It's more like the word 'sway' or 'pull' in English, in a networking sense. It incorporates cronyism, family duty, nepotism, friendship, business connections, political power...
- Moral connotations can be completely different. Guanxi is a good thing sometimes, bad thing other times. Giving a key job to your son is bad in a Western company, arguably 'good' in the East. Providing he's not useless.
- You don't leave business networks at the door of the house; guanxi networks permeate friendship/family/business connections. You might not normally introduce a business colleague to a member of your family, in the west. This relates to my earlier point about it being less structured than Western influence systems.
- Reciprocity matters. Let's say I do you a big favour. You pay me back the next day by giving me a set of tickets to get a nice dinner somewhere. By maintaining a balanced relationship we remain friends. In Chinese culture this would be a bit of a faux pas. By repaying immediately and at a similar level to the gift received, you're basically extinguishing the opportunity to develop guanxi immediately - an unfriendly act. Where western relationships tend to be balanced, and quickly, Chinese relationships instead seem to prosper through periods of imbalance, overpayment back, and so on. The scales should not be balanced, they should sway back and forward. This dynamic is characteristic of a good friendship or a good guanxi connection.
Source: sat at the back of a 10-week course on Chinese business studies, during my PhD, and had a friend whose master's thesis topic was contrasting guanxi with western-style 'leverage'. No citations, feel welcome to treat it as hearsay. :)
I don't know what the final dissertation title/theme ended up as, but we talked a lot about guanxi vs other similar cultural behaviours while he was writing it.
Option A) The wife of a former president
vs.
Option B) A former close friend & financial donor to the same former president.
Chinese guanxi looks pretty tame compared to the US race for 'most powerful person in the world'. :-)
In that scene, somebody wants the Don to go beat the shit out of somebody who beat the shit out of his daughter, and offers to pay money.
In response, the Don asks what he has done to make the other guy disrespect him so.
Guanxi is all about building relationships, not mercenary transactions. In asian culture, if you toss somebody some money for a transaction or a favor, you're treating him disrespectfully as an employee.
From the Wikipedia page, the most useful paragraph in describing the differences is probably the second paragraph under "Western vs. Eastern social business relations": https://en.wikipedia.org/wiki/Guanxi#Western_vs._Eastern_soc...
It's useful because it uses a framework for understanding relationships in either culture: trust, bonding, reciprocity, and empathy. Western guanxi and Chinese guanxi can be understood through this framework. While I'm open to the idea that it's a flawed framework, it proves my point that Western culture has analogous social expectations. Less like beet sugar and aspartame and more like bat wings and bird wings - both shaped differently, both used differently, but for the same function. I am interested in the differences, but there will be a fair amount of structural similarities.
I also disagree with your characterization of this perspective as being "very western." Considering guanxi as something fundamentally different from how Western culture works is Eurocentric - very Western, as you had said. Stepping back and analyzing how informal Western reputation systems work in the same light as how guanxi works in China is a way of de-centering the Western perspective and removing the exoticism from Chinese culture.
From my outsider perspective, it's not that there is no western analog; rather the meaning changes with context and therefore it is difficult to translate as a single concept (in English at least).
From your response above, I think that you're correct (from my experience) in saying it is "trust, bonding, reciprocity, and empath", just not necessarily at the same time.
Sometimes it's "trust", sometimes its "nepotism". But it's definitely fluid.
"In the Western perspective, trust is referred to as mutual reliability, dependability, and reciprocity. However, in the Eastern perspective, trust is also synonymous with obligation, in which guanxi is expected to be maintained through continuous long-term association and interaction. Whereas bonding in a Western context may refer simply to common interests with the client, bonding in an Eastern context refers to a close friendship with the client. The Chinese system of wu-lune (the basic norms of guanxi) supports this Eastern attitude, emphasizing that one’s fulfillment of one’s responsibilities in a given role ensures the smooth functioning of Chinese society. Reciprocity is also a dimension which is much more emphasized in the East than in the West. According to Confucianism, each individual is encouraged to become a yi-ren (righteous person) and repay a favor with significantly more than one has received. Lastly, empathy is a dimension that is highly embedded in Eastern business relations, more so than in its Western counterpart. The Confucian understanding of ren, which also equates to “Do not do to others as one does not want others to do to him”, stresses the importance for sellers and customers to understand each other’s needs.[19]"
>Guanxi largely originates from the Chinese social philosophy of Confucianism, which stresses the importance of associating oneself with others in a hierarchical manner, in order to maintain social and economic order. Particularly, there is an emphasis on implicit mutual obligations, reciprocity, and trust, which are the foundations of guanxi and guanxi networks.
The "hierarchical" part seems to be crucially lacking in your example.
A good example imo of Guanxi networks in the West are College Alumni Networks, as well as the more recent but analogous Startup Accelerator Network. The "older/younger class" relationship makes these Hierarchical.
Thanks for clarifying.
This is the part hinting at the fact that Don Corleone is in a higher position of power. And since this is Don Corleone speaking, you are missing the way he is being adressed by the one asking the favor - clearly looking up to him.
Hierchical power structures are not just a part of Confucianism, there are everywhere around the globe.
When Elon buys SolarCity and the CEO is his cousin, that's guanxi.
When your boss gives a promotion to guy who plays golf with him, that's guanxi.
When you give your buddy a referral to a job because he helped you out with yours, that's guanxi.
It's a necessary social lubricant that also spawns nepotism, favoritism, cronyism, corruption, etc and can be found in every business large enough, especially the government.
And unlike what some posters seem to think, it's not a Chinese-only thing. It's a universal thing that has a Chinese word that nicely refers to it, and thus more recognized in Chinese society.
I know plenty of Chinese people who are highly annoyed or disgusted by the necessity of cultivating guanxi, but know that they're not going to get what they're after otherwise.
Is it just me, or has the yuan significantly appreciated in value...?
Chinese often try to sugarcoat guanxi. But to put it bluntly, it is for law/rule breaking or law/rule bending favors to acquaintances. Only because the Chinese have practiced it for millenniums as a daily surviving activities, just as eating and sleeping, the Chinese have forgotten that it's an ugly way of life. Guanxi in China is not a shameful matter _at all_, but a proud and face-boosting accomplishment which is often boasted in meetings and banquets, on social networks, and announced publicly and proudly to anybody as a show of strength.
So, the absolute necessity of guanxi, the enormous amount of utilities, the glories associated with it, most people not grown up in China/Taiwan would find it impossible to play at China's extreme level.
What's the secret source to crack guanxi in China? IMHO, it is this: always remind yourself __the lack of trust is at the core of the Chinese society__, and deduce from there. Law and law enforcement are not trustful, so you need to have friends in the government. Business contracts are not to be trusted at all, so constant monitoring and vigilance are absolute necessary during the entire business interaction with your Chinese partner, even though the contract signing ceremony was attended by high level governmental officials and announced on national newspapers! Doctors and nurses will probably give sloppy or delayed treatment because they are expecting money and gifts from you or your relatives before they treat you, if they are not in your guanxi network, so always work on your network to include someone in hospitals. Don't trust the law to punish the bad doctors for such cruelty, there is no such thing. You get the picture. Now anybody still say it's similar in developed western countries? :)
So how to go about build guanxi in China? If you have overcome the unbearable loath on the whole matter and said to yourself, I am gonna play it all the way to fucking make it in China. My advice is, do what the Chinese do. The No.1 approach used by Chinese to build guanxi is to __inject fixed|irremovable elements into your relationship with someone__ if you want to guanxi that person. Such fixed|irremovable elements include things such as born in the same province, graduated from same school, served in the same division in the army, have worked in the same company(maybe at different time), related to each other by blood no matter how distant that is, basically anything that will not change for the rest of your life, and preferably the elements happened in the past, not recently, as history and time add a little seriousness and trustworthiness to it. In contrast, fickle things in relationships (in the eyes of the Chinese) are things such as your abilities and accomplishments, your credentials, social status, the promises made, member of the same club at this moment (this helps a bit but needed further enhancement), etc. Fire up your imagination and creativity to find out the fixed elements in guanxi, promote it, enhance it, and build from there.
People find it impossible to play at China's "extreme level" not because the level is extreme, but simply because of cultural differences. All you have to do is to look at how Chinese friends and American friends treat each other. The Chinese are much more generous in lending money to their friends, or sharing food, or wtv, something that simply doesn't happen in the West. This, of course, also has nothing to do with extreme lack of trust, or attempting to build guanxi for other purposes.
>Doctors and nurses will probably give sloppy or delayed treatment because they are expecting money and gifts from you or your relatives before they treat you, if they are not in your guanxi network, so always work on your network to include someone in hospitals. Don't trust the law to punish the bad doctors for such cruelty, there is no such thing. You get the picture. Now anybody still say it's similar in developed western countries?
There no need in the West for this simply because the health system is multi-tiered. Rich people will just pay more money for better healthcare, thus no need for the whole backdoor stuff.
Anyways, I have yet to seen someone rebuke my argument I wrote previously about how joining a frat and finally getting a job through it is just as "guanxi" as anything else in China.
People mostly get their jobs through recommendations anyways. http://www.nytimes.com/2013/01/28/business/employers-increas...
That said, guanxi, as a sibling post speculates, is all about trust. It's the idea that beyond a simple task at hand, there is a deeper relationship to be honored, for whatever reason. The "developed" world on the other hand loves the notion of contract and enforcement through the rule of law, so that people wouldn't need to rely on silly things like trust and good will.
The lack of trust is at the core of the State and the legislative system (cf Hobbes) which is distinctive of Western societies.
In the past Chinese have lived in small villages. Even though the land is vast, people rarely moved to other places due to lack of means and the atrocious government policies. So ordinary people dealt with relatives and village folks in their entire lives. Trust was based on the threat that you would be practically dead if you behaved badly and were shunned by the village.
Now coming into the 20th century, people started moving into cities to interact with strangers. It's a new and somewhat shocking experience, because most of them only knew the way of life which you just obey the orders from parents/senior family members, follow the old rituals. Unlike the western countries which went through centuries of Enlightenment, the new Chinese cities are almost void of social and civil code, void of sensible law and law enforcement. That's what China has been through in the last century. Quite a few, now escaped from the watchful eyes of folks back in the villages, use the newly gained freedom to conduct unlawful activities, from fabricating their credentials, to using dirty recycled oil to prepare food, all the way to bribing and accepting bribes to drive people away from their home in order to build a shopping mall. So imho ordinary Chinese do not trust each other that much. They seek insurance(strong guanxi is a form of it) in all daily interactions, and hope others would behave.
"instead of trusting normal social contract and normal civil relationship between strangers". What's "normal" to you? Western way of life?
"unlawful activities": because there's no such thing in the West? It is actually the opposite: Chinese people are less prone to do criminal activities, so much that I'd let my 10 yo daughter walk at night almost anywhere in China, while even a male adult wouldn't walk unaccompanied in many places in the West. I do not say that it is because of some special essence of Chinese people, to me it is simply because of a better education.
Foreigners are definitely included in these circles, it is just that their use is very limited (what good is an English teacher in your network, or a software engineer). Also, the FCPA makes participation dangerous for us Americans, at least. Even giving a doctor a red envelope at a state hospital is in violation.
A very good and realistic, although slightly exaggerated example of the things written here is the book "Party Members" by Arthur Meursault [1]. It has quite a few fantastic scenes describing building and using guanxi as it is done in China on a daily basis. It may seem extreme to those who haven't lived or done business in China, but that's the grim reality of it.
[1] https://www.amazon.com/dp/B01IJLRVBW, https://camphorpress.com/books/party-members/
> Roughly equivalent words in other languages include sociolismo in Cuba; blat in Russia; guanxi in Chinese and Vetternwirtschaft in German, protektzia in Israeli slang, un pituto in Chilean Spanish, In Brazilian-Portuguese it is referred to as "pistolão", "QI" (Quem Indica, or Who Indicates), or in the slang "peixada", "Pidi Padu" in Malayalam, "arka" or "destek" in Turkish.
There's a joke (mostly making fun of modern Israeli pretensions to clean modern society) - the kids these days don't mess with protektsiya, they have "connections" (the English word) instead.
It differs how much it influences daily interactions, citywide or regionally. In Beijing it is noticeable in a lesser degree, but often is perceived by outsiders/foreigners as 'bribing' when a small present is involved.
Edit: I do not mean anything bad. I have lived in Beijing, China for many years (married to a Chinese). Just some foreigners have more difficulty to understand this (as the reasoning why they call it the G-word). I hate to call this a 'cultural difference', as I believe it is mostly related to misunderstanding. This is all due to a different upbring, in a different environment (and receiving a different sense of what is common). This can often lead to misunderstandings as people perceive the actions in the wrong way. It might help to have a look at Cultural Dimensions [https://docs.com/gerard-braad/1061/cultural-dimensions-asia]. This explains some of the things involved. Just a translating it to 'relationship' does not mean it has the same meaning. Many words and concepts are different between cultures. TL;DR It is definitely not the negative words mentioned below. Just 'smoothing' a relationship which seems beneficial should not be seen as brown-nosing. Above; hyh1048576 explained it very well. People blame themselves if they got rejected for something... others might judge them as saying they haven't put enough 'effort' into it. When the relation seems beneficial, they will try to do something to 'smoothing' the relationship. But as mentioned, in Beijing this happens in a much lesser degree but not invisible.
There's nothing uniquely Chinese about the notion that having strong relationships with the right people can make your life easier.
Having a good relationship is important. Giving a token of appreciation is accepted and often expected?
Consider a student who studies abroad and gives such a token to his professor. Totally unaware that a few days later he gets dismissed from the university for bribing. (Or involves a lot of back and forth between the universities to explain the behaviour. This is something we have seen many times)
Now let's look at the foreign manager working in China. Building relationships by exchange of a businesscard is normal. A small gift, like a pen is accepted. But he doesn't know how to respond to a situation when some rituals are involved; such as paying for a dinner. But often relationships extend beyond a business situation and people can ask you for a small 'favour' that is unrelated to business... but can put someone in a very awkward position, as it does influence further business (and often complicates it). Managers who go abroad are sometimes even warned about this when going here. Note: which I believe is also bad as it creates a stigma and prevents from understanding it. Maybe after a few months he understands more of it, but he will likely ignore the reasoning or the actual intent. But again, this is not specific to China (happens in most Asian countries and the West or anywhere else in some form or way).
It also work at a much lower level: if you have good "guanxi" with the boss of the abr in front of your door and often brings friends, he will be nice and, say, call you if the cops are coming when your car is not correctly parked.
Also, if you build your own house, some neighbourghs might play it nice and allow you to use a bit of the public road to stock piles of brick or whatever.
All of these mean we are not wild beast living in the forest, neither are we cowboys, we have a to live in a society and having good relationships with anyone around you (upwards, downwards and at the same level) is very desirable.
In Germany we have "Vitamin B", i.e. beneficial relationships. In America, on the other hand, they have this strange concept of meritocracy.
American is the land of legal lobbying. I'd say this is pretty close to that concept too.
I can definitely understand ladder-climbing in the workplace but there are countless instances of people acting without dignity or restraint. It's downright unsightly.
Thus proving gbraad's point?
Guanxi is not those things you mentioned. Incidentally, it's not something that is difficult for foreigners to grok - they just need to have some exposure and experience with it.
https://en.wikipedia.org/wiki/Socialism_with_Chinese_charact...
"When in Rome" and "know thy enemy" makes sense but the tasteless passion that people have for blatant cronyism is quite unpleasant.
This may also be of interest:
Maybe it's by taking people out to dinner and getting drunk with them, building up a certain type of camaraderie.
Othertimes it's outright bribery.
But this sort of thing:
> boot-licking, toady, lackey, stooge, sycophantic, brown-nose.
Rarely works to develop good guanxi.
I do not think it's particularly more difficult to grok than any other Chinese words or concept that represent non-trivial aspects of Chinese society and culture.
http://i.imgur.com/8XvwPnl.jpg
"I like to do things in the formal way. Utilizing the Chinese Guan Xi method is limited to direct contact only. Unless I have no other ways to make things happen. I do like to keep simply relationship with others, instead of a GuanXi just for profit"
1) How do you build guanxi?
2) How do you maintain guanxi?
3) How is guanxi lost after it's been gained?
4) Give me an example with two people where one has far more guanxi than another. How are they treated differently by the third party they have guanxi with? (No direct familial relation)
Treating people to dinner and getting them drunk is a pretty common way of building guanxi. I've had people invite me to dinner and give me alcohol I don't want, hoping to then get something out of me later. The whole thing is terribly uncomfortable, largely because I simply don't like going to dinner with people I don't know well, and do not feel like I owe them anything afterwards (if anything, I'm annoyed that they've imposed on my time). Then they call up week or two later and say "hey, can you help me out with this thing", and then I have to decide what to do about that.
Like I said in my other comment, though, plenty of Chinese people don't like working this way either. My friends are real friends, and the people I usually work with are professionals, people who don't need to pretend that now we're blood brothers and we'll bend the rules to help each other. I've been in China for 15 years, and I've seen this kind of professionalism slowly supplanting the old system.
You lose guanxi by pissing off your "friends", or not returning favors. In my case, I can play the "I'm a weird foreigner and don't understand your rules" card, and I've only ever mildly annoyed a few people.
This also leads to somewhat amusing cultural disconnects. For instance, I was once interviewing a Chinese student for an officer position in the student club of which I was already an officer. (This is at a US university and I'm Chinese American) He came to the interview and gave me a bottle of 7-up.
"The build is broken, did your push break it?" "Uun, kankei nai" = no, it's unrelated.
Which is not to say that Japan doesn't have its own complex web of social obligations and favors (giri, osewa, senpai/kohai etc), they just don't use the same word for it.
But if you have 関係 with somebody in Japan, then that simply means there's some sort of relationship (vendor/customer, former schoolmates, whatever), not necessarily the kind that lets you call in favours.
That's the same as Chinese, though. If you want to say two people you'd use guanxi (”关系不好“ "guanxi bu hao" “have a bad relationship"). Even your above example is used in pretty much the same way guanxi is used. Here's an example from the Baidu entry on guanxi: "小王跟这件事没有关系" "Xiao Wang has no connection to that thing."
From what you write, it sounds like the Japanese use of the word is fairly similar to the Chinese use of it.
Smithers: Unlikely, sir. They spell and pronounce their names differently.
Mr. Burns: Bah! Schedule a game and I'll ask him myself.
https://en.wikipedia.org/wiki/Tsinghua_clique
https://en.wikipedia.org/wiki/Tuanpai
There is something to be said for unbridled single-minded ambition.
For instance, the words for "buy" and "sell" differ only in tone.