As China has developed rapidly, western companies and investors are now paying more and moreattention to China. They are no longer only looking for manufacturing services but also want to get apiece of the enormous market potential that China holds. A common problem that westerncompanies often face in China is the one of culture differences. Two of the most important parts inthe Chinese business culture that foreigners need to understand include guanxi and gift giving. Onlywhen they master these areas they can be accepted and included in the social network that guanxi is.The main point of this thesis is to give the viewer a clear understanding of what guanxi and gift givingin China is all about and how it can be used to help in business and networking as well as point outthe differences between western and Chinese business culture. Interviews have been made withthree companies with different background in order to get a better understanding of the real lifeimplementation of guanxi and gift giving. The findings of this thesis include that networking andrelation management in China can’t exclusively be implemented in professional situations only butalso in daily private life. Gift giving is a way of maintaining guanxi and a good relationship with yourChinese counterpart at all times.