In China, business people have no assurance that the contracts they sign will be enforced. Even the ones with all the requisite chops. So they try to do deals that rise and fall on their own merits, and will not need enforcement. They place little stock in the possibility of recovery if the contract is breached.

This sounds like a tough place to do business, and it is. It is one reason why the invocation of relationships - guanxi - is constant, and a cliché, but not entirely misplaced.

For years Westerners thought guanxi meant knowing the right government officials so the deal could be greased through. But this is only a part, and one which is increasingly less important. What really matters is the ability to trust. If you have dealt with someone for 20 years who has always been trustworthy, there is reason to believe he or she will be trustworthy again.

You cannot substitute a Rolex and a few rounds of banquets for those 20 years. I am not convinced you can substitute anything. So people who wish to make their business future in China have to be ready for the long, long haul.

If I wanted to succeed in China I would put in place a cadre for their own Long March. They can be non-Chinese (although fluent, sooner or later, in Mandarin) or Chinese. The main requirement is that they be incorruptible. They should be prepared to work on small deals for years while they develop the relationships that will one day pay off.