You Say Guanxi, I Say Schmoozing

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It's a serious club: Members who miss one of the mandatory annual meetings must pay a $10,000 fine (which is donated to charity). The alums also gather almost weekly for meals or rounds of golf (one member has his own 36-hole course), where they share ideas and business gossip. "Guanxi is an evolving thing," says Chang Sun, managing director of private equity firm Warburg Pincus Asia and a charter member. "It used to mean access; once you had it you could open doors. Now it's relationships that can inform and educate you."

Multinational companies, of course, provide rich opportunities for networking, too—and some are trying to goose the guanxi. Ogilvy Public Relations Worldwide holds an annual party for former employees, many of whom now work for O&M clients, including Lenovo, Johnson & Johnson, and solar-panel maker Suntek. McKinsey has plenty of alumni who have moved into senior posts at major companies and startups. "Obviously, they became a valuable network for us," says Andrew Grant, who runs the firm's China practice in Shanghai.

Procter & Gamble (PG) China "graduates" have their own Web site, where they post everything from new job prospects to potential tennis partners. Jerry Liu, who joined P&G along with 80 other college recruits in 1997, recalls an intense bonding experience. "When you join the company, it's like entering another college," says Liu, who subsequently did an MBA at the University of Michigan and used his P&G connections to land a job at Coca-Cola (KO) in Shanghai.

If one thing has remained the same for foreigners in China, it is this: Cracking the guanxi code still takes hard work and perseverance. Schmoozing at an alumni barbecue or wine tasting goes only so far when trying to build relationships of any lasting value. After the first 30 minutes at these functions, say people who have attended, foreigners and locals almost invariably break off into separate groups.

What's more, Chinese businesspeople are more experienced and globally savvy than they were just a few years ago. They're looking for business connections who can help them expand outside China or get their company listed on a foreign exchange. "People want something more professional and strategic from their relationships," says Li Yifei, Viacom ()—] 's chief representative in China. "They want to know how good your guanxi is back home."

Balfour is Asia Correspondent for BusinessWeek based in Hong Kong .