The skyline of the Pudong district in Shanghai

Guanxi. It's more important to U.S-based meeting planners looking to book meetings in China than return on investment, room rates, or site selection. It means connections and, without it, international meetings in China are hard to accomplish.

Experient has discovered the concept of guanxi and is using it to serve its clients, thanks in large part to Ping He, director, international market development at the Twinsburg, Ohio-based meeting planning company. He, who was born in Shanghai and moved to the U.S. in 1989, made the connections that have enabled Experient to form a strategic partnership with a leading Chinese destination management company. “To be successful in China, you have to team up with a very reputable local partner that has a good track record and a direct connection with the government,” she says. “When your guanxi network is working for you, the inevitable risks, barriers, and bureaucracy of doing business are minimized.”

Confucius Says

With a growing economy, rapidly developing hospitality infrastructure, and desire to do business with the West, China is seen as the next great frontier for association globalization. But tapping into the vast potential of the Chinese market is not easy.

That's where guanxi comes in.

Acquiring the right guanxi with the relevant Chinese authorities is critical because China is a communist country and decision-making is top down — starting with the government. Even associations, which are called non-governmental organizations or NGOs, are government-sponsored.

But the importance of guanxi runs even deeper. The Chinese way of doing business stems from Confucianism, which speaks of the importance of hierarchy and top-down decision-making. “For thousands of years, this is how Chinese society has operated and some people say guanxi is the lubricant oil that keeps the Chinese society going,” says He.

When you develop a relationship with a government official or entity, it improves your competitive standing, acceptability, and access, explains He. For example, mailing lists, publications, and e-mail databases, which generally cannot be obtained without Chinese government approval and involvement, are accessible with government connections. This is critical to attracting Chinese attendees to an event. Access to historical sites, venues, and attractions is easier with connections.

The best way to establish a connection with the government, He found, is to do it through a well-known local supplier.

Since she started working with Experient 14 years ago, He has maintained relationships in China, visiting at least once a year, preparing for the day that China would become part of the global economy. That happened in 2001 when China joined the World Trade Organization. “That was the turning point,” she says. “With [China] entering the WTO, everything was possible. Before that, it was hard to do business over there.”

He, who had been a meeting planner at Conferon (now Experient) at the time, went to the CEO and said “use me, put me in the right spot, and I can help the company.”

A Local Partner

Through her local network in China, He established a relationship with a company called FESCO — the Beijing Foreign Enterprise Service Provider. It's one of the largest, most successful companies in China, and it owns and operates a DMC. She got to know the managing director at FESCO DMC, who, in turn, has a connection within the Department of Commerce. Subsequently, Experient was able to form a partnership with FESCO DMC to service its existing customers who would like to hold events in China. In return, FESCO gets Experient's business.

“We wanted to provide an infrastructure so our customers can experience a kind of meeting experience like they do at home here in the U.S., but this kind of experience cannot be achieved without a good partner,” He says.

She spent a lot of time working locally with the DMC to train its staff on Western culture so that they know the details on how American associations and companies conduct meetings. He handles the planning — booking hotels and activities, negotiating, etc. — while the DMC serves as the project manager, using its local expertise to execute the plans on the ground. In addition, FESCO DMC has credibility among and is endorsed by the locals, which is critical in attracting Chinese attendees to the event.

In 2007, Experient planned a very successful meeting in Shanghai for Miami-based Terralex, a global association of law firms. This year, it is planning an event for Caterpillar during the 2008 Beijing Olympics.