Michael Dell illustrates Chinese Guanxi in practice

One of my first previews of the importance of Guanxi in Asian business culture were the early stories told by my Uncle John, who in the 80s was the National Sales Manager for Zenith based in Austin, Texas. Uncle John was raised in Taiwan following the Chinese Communist Revolution in 1949, so his opportunities to immigrate began much earlier than we have witnessed over the past two decades of Chinese citizens flocking overseas with their wealth and children.

A young college student walked into the Zenith office, also a store back then, and asked my uncle about getting a couple of monitors on consignment to build computers that he would try to sell. He said, "I can't pay you for them now, but after I sell these computers, I'll pay you and purchase more."

Uncle John described a confident young man who seemed very 'trustworthy,' so he granted the request with no timeline to pay, simply saying, "Just come back whenever you're ready for more." Several years later, he moved back to Taiwan to take care of his father, my grandfather, and he joined Quanta Computer Inc. as a senior advisor to the Chairman, who was his college friend. Quanta is a Taiwanese contract manufacturer specializing in laptops, and their largest key account was Dell Computers.

In case you haven't figured it out yet, the young man in Texas assembling computers was named Michael, as in Michael Dell, who helped revolutionize the personal computer industry with his direct-to-consumer business model.

As the computer revolution was happening in America, China was just beginning to open up. The biggest aspiration of most ordinary Chinese citizens was still to own a television and bicycle, as very few people even had personal landline phones. Uncle John describes that he always knew the phones in his hotel rooms were tapped, but he found it whimsical how easy it was to sell computers to Chinese government officials. These officials didn't care what computers could do or be used for. Instead, they wanted to carry these early 15-pound portable computers around for their Face-giving prestige. This story reminds me of my early days in China when the first thing every Chinese businessperson did before dinner was to slap their bulky mobile phones on the table as a show of stature. The size of your cellphone was a symbol of your importance in Chinese society (地位 dìwèi) and an integral aspect of its Face culture.