
A few years ago, in a Shanghai conference room, a Korean executive stood up and made a phone call. His joint-venture partner of more than a decade had gone quiet as their factory dispute escalated. Years of holiday gifts. A seat at the man’s daughter’s wedding. Countless dinners across two economic cycles. Surely that bought a returned call.
It rang. Nothing. It rang again that afternoon, and the next day. What collapsed in his face wasn’t the deal. It was his certainty that fifteen years had built something.
It hadn’t — not in the way he thought. He had built proximity. He had never tested whether it created obligation. We measure relationships by time. Markets measure them by what they make people do.
Did what he believed was a relationship ever obligate the other side to act on his behalf — not attend a dinner, not answer a text, but spend their own capital, risk their own standing, because of him?
Guanxi (關係) is not friendship alone. At its commercial core, it is reciprocity with memory — a running account of favours extended and owed, kept current through repeated, deliberate exchange. Feelings are the wrapping. The ledger is the thing.
China asks what you owe each other

That creates a paradox. Some of the most generous foreign operators in China are also the ones who misunderstand guanxi most badly. They make introductions, concede terms, absorb delays — and rarely ask for anything back. To a Western eye, that looks like an easy, low-maintenance partner. To the ledger, it looks like someone who was never let inside it. A relationship with no debt recorded on either side has nothing to call in when the debt comes due elsewhere. The operators who understand this don’t just give. They allow themselves to receive. Reciprocity requires both.
Japan asks who was aligned before the room
A European software firm once arrived at its first Tokyo meeting with a signed contract already on the table, intended as a gesture of efficiency. Six months of cordial meetings followed. Then silence. The real decision-making had begun long before any of those meetings, through 根回し (nemawashi) — the practice of privately aligning every stakeholder in sequence, so that risk and responsibility are distributed before anyone commits in a room.
Arrive with the paperwork already drafted, as the European firm had, and you haven’t saved time. You’ve announced that you don’t understand how commitment is built here — and disqualified yourself as a serious counterparty. The meeting was never where the deal would be won. It was where you found out whether you’d already lost it.
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Korea asks how high the idea has travelled
Response is fast. Meetings run warm. “Let’s make this happen” comes easily — which is precisely why so many foreign teams misjudge how far they’ve actually gotten. The working team can love your idea. It may still mean nothing. Emails move quickly, a proof-of-concept gets drafted, someone even says the deal is “essentially agreed.”
Trust in Korean organisations runs vertically, though, and nothing moves until it clears the top of the approval line — the 결재 chain. A project can occupy months of enthusiastic correspondence without the actual decision-maker ever having seen it, until the day the air changes and someone mentions “further internal review.” By then, the project was never on the one desk that mattered.
Different systems. Same mistake: foreigners assume that time itself has built the relationship. It hasn’t.
Foreign operators make three mistakes.
- They mistake activity for depth. Dinners prove that someone remembers you. They do not prove that person will move for you.
- They mistake Asia for a culture. Guanxi, nemawashi and Korea’s approval hierarchy are not variations of the same system. They are different grammars.
- And they mistake time for capital. Fifteen years means nothing if those fifteen years never created an obligation, consensus or authority to act.
Five thousand business cards are not a network. One person willing to spend their own capital on your behalf is.
Look at your phone.
Don’t count how many years you’ve known the people in it. Ask who has spent political capital inside an organisation for you. Then ask the question that matters: if taking your call tomorrow could cost them something, who would still pick up?
That is your network. Everyone else is a contact.
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