In this study I have tried to map out the challenges that Norwegian companies can face when they enter the Chinese market.It is desirable to have a more thorough and comprehensive understanding of the problem.I also conducted thorough research on various cultural aspects regarding interaction and interdependence of each other.When entering into business cooperation between Norwegian and Chinese companies,you will encounter the phenomenon of "guanxi",built on ancient Chinese traditions rooted in Confucianism.This is a philosophy that lays the foundation for ethical and moral principles and values."Guanxi" as a phenomenon constitutes a major research topic,and there are many factors that play a role and influence the dynamic balance.With this,I wanted to limit this thesis to cultural understanding and participation in Chinese business culture.Furthermore,I looked at how these factors affect work of building a strategic alliance.Cultural understanding,participation and building a strategic alliance are the main themes of this study and will also represent the main structure of the thesis."Guanxi" is a common phenomenon in my thesis that used as a reference through all my main themes.Based on this I came up with a suitable Research question:RQ1: “How does the degree of understanding and active participation in Chinese business culture affect strategic alliances for Norwegian companies in China”?To answer the research question,I collected empirical data by extracting relevant theory from previous research and then comparing this with empirical findings from real life.This was done through in-depth interviews with representative respondents that I believe were suitable for answering research question.I examined five companies that met predefined characteristics / criteria.This is to ensure that the sample was as homogeneous as possible.I used exploratory study.Exploratory study aims to try an understand what is happening,to gain more insight or to ask questions regarding phenomenon’s that occurred during my research therefore I found it qualifying to use an exploratory study.It allowed me to look at the significance and the connections between the data collected.Through the empirical findings,it is revealed that cultural understanding is exercised on different levels.Confucianism colors the Chinese mindset and influences the norm of acceptable business practice.In practice,this means that Norwegian companies that are in an establishment phase in China should have a conscious relationship with "guanxi".This can lead to easier access to strategic networks and necessary resources.Mutual trust and respect are important ingredients for achieving a long-term business relationship.Overall,my research indicates that the higher the degree of understanding and acceptance of cultural differences,and active participation through the adaptation of Chinese business culture,the higher the probability of success in an alliance between Norwegian and Chinese companies.Contribution: With this research I hope to be able to contribute to increased understanding and the basis for correct action when forming an alliance between Norwegian and Chinese companies.Today it is limited with Norwegian literature on this field.And also,it is my understanding after living in China for three years and talking with companies and people back home that this is something they know little about.I want to contribute to more knowledge and understanding of Chinese business culture and less “learning by doing”.The forecasts show that China will increase its global export share,and thus this topic is most relevant today and in the future.Limitations: I was aware of the low degree of generalization in my respondent mass but in this exploratory study I was looking into companies within a given context to investigate a specific phenomenon.I had some limitations with slow responsiveness through email.And also,I had problems getting in contact with Norwegian experts in this field.There is also a lack of literature on this field in Norway.Further research: It would have been interesting to study how the dependency rate changes over time.It would also have been interesting to study more about the ethical and moral aspect of "guanxi" in business transactions,especially with a focus on whether volume has an effect on the meaning of "guanxi".In my research,I interviewed five Norwegian companies from different industries.Another study would have been to carry out a similar interview round with five Chinese counterparts to get a larger and more comprehensive overview of the dynamic interaction between the parties.Finally,I would suggest a similar study using another methodological approach,for example,a quantitative study where a questionnaire is used.In this connection,one can therefore have a significantly larger selection,and consequently increase the degree of generalization.