what are the downsides to guanxi 
because it is so dependent on relationships guanxi taken to its extremes can cause cronyism nepotism and corruption on occasion illegal acts result from misapplied guanxi further guanxi often ignores the qualification or merit of the individual favored in other words guanxi can lead to the less qualified person obtaining a position or deal leading to a less productive situation for the business the bottom lineunderstanding guanxi is essential to doing business successfully in china only by building social and business networks and contacts can a western person fit well enough into the guanxi system to succeed 