To what others have said here I'd add that, in my observation, the prevalence of guanxi is connected to a lack of fair, functioning, transparent social systems.

To what others have said here I'd add that, in my observation, the prevalence of guanxi is connected to a lack of fair, functioning, transparent social systems. You often need connections to get things done, because the existing systems (legal, administrative, etc) simply don't function. This could be anything from getting your kid into school, to being seen by a (competent) doctor, to protecting your company from frivolous, malicious legal action. I know plenty of Chinese people who are highly annoyed or disgusted by the necessity of cultivating guanxi, but know that they're not going to get what they're after otherwise.