What’s the link between Wolves, Brad Pitt and UK broadcaster Channel 4? The Chinese concept of ‘guanxi’ holds the key

When Chinese conglomerate Fosun International Limited acquired English second-tier football club Wolverhampton Wanderers (commonly referred to as Wolves), many of the club’s fans anticipated a cash windfall and some high profile player signings. Neither happened; indeed, the team’s performances were so unsatisfactory early on in the season that the team’s manager was sacked.

Fosun were clearly unhappy, as languishing in the lower reaches of second-tier English football neither cast the company in a positive light nor added significant value to China’s current football revolution. Even so, Fosun is unlikely to see its first foray into European club ownership as a disaster.

Football alone was never likely to be the only reason why Fosun bought Wolves. As a conglomerate, this might seem an obvious thing to say, as this type of organisation owns multiple businesses across a number of often unrelated industrial sectors. At one level, Wolves could be just another investment in a broad portfolio of Fosun properties.

However at another level, acquiring assets in football brings a much broader range of potential benefits. Fosun owns a 20 per cent stake in Gestifute, football super-agent Jorge Mendes’ player representation agency. Together, Gestifute and Wolverhampton have opened-up a network to Fosun that is ultimately intended to be of much greater value to the company.

Networks in Chinese culture are so fundamental to doing business that China even has a name for it: ‘guanxi’. The literal translation of guanxi is often difficult to pin-down but is sometimes defined simply as ‘relationships and connections’. Guanxi is rather more profound than Westerners might imagine, based upon their own notion of ‘connections’. It is a form of reciprocation – what Westerners may call ‘a favour for a favour’. That is, Chinese business people will often give something to someone in return for, at a later date, being able to ask that person to give something back or to exert influence on their behalf.