A Case in Point - When you don’t pay enough attention to Guanxi

If you know a little bit about China, you know the importance of guanxi, or connections, in doing or conducting business in the country.

Say, there is an opening ceremony of your business in somewhere of China. You may know that you will have to invite the officials of various authorities to the ceremony. But you may not know that you will have to do it in person, not just sending your assistant to deliver the invitation. Otherwise the consequence would be grave.

Read this news from South China Morning Post dated 5 August, 2006. It is appalling that how abusive and corruptive many of the Chinese officials are, and how women are being taken advantage of in the still male-dominant business world.

The management of a new five-star hotel has found out the hard way that guanxi, or connections, still play an important role in doing business on the mainland - and that it is not a good idea to ruffle the feathers of local officials.

The Yintian Hotel, located in Liuyang in Hunan province , was suddenly plunged into darkness at 8.40pm on Monday, its opening day, after local electricity bureau officials retaliated for what they felt was a slight by the hotel’s management.

The order to cut off the electricity supply to the 150 million yuan hotel was given by two senior officials of the city’s electricity bureau, Zhou Jiaoyao and Li Licai , Xinhua reported. The pair were apparently miffed because the hotel director failed to deliver personally an invitation to the hotel’s opening party. The invitation was delivered by an assistant, Xinhua said.

As the entire hotel - and nearby residents - sat in darkness, and as hotel operations came to a standstill, a female manager of the hotel and an assistant raced to another hotel, where the two angry officials were drinking with colleagues.

Mr Zhou and Mr Li insisted the power would remain off for the whole night - but promised to reduce the duration by one hour for each bottle of baijiu, or grain alcohol, the two female hotel employees consumed.

After the women downed seven bottles of the strong alcohol - and rebuffed unwanted romantic advances - the order was given for the electricity to be turned back on.

The hotel said the incident had caused financial losses, as customers in the hotel, restaurants, health club and other entertainment venues demanded refunds and compensation.