Chinese Proverb - Don't open a shop unless you like to smile.

I went shopping for a few items to a charming little shopping in Sunlitan today. the name of the mall was Yeashow, and it is the biggest and best place to get fake anything in China. They have everything from designer bags to clothes and electronics here. I was out with a friend of mine from IU, a chinese international student who I knew from tutoring at IU. I had told her I was going to be in Beijing and she had offered to come by and show me around. I had gone shopping before this, and everywhere I went, I noticed a different demeanor amongst the shop owners. Now, instead of starting to haggle for a Coach purse at RMB 1000, they were saying things like "350, friend price". What was this friend price? Was my extremely amiable face causing me to get great discounts? After a more english-adept shopkeeper explained to me that since I was with Chinese people, I was a friend, and they would not try to sell me things at the tourist price, I realized that I was witnessing Guanxi first hand. The power of personal connections, that purportedly runs businesses in China, was happening here, in front of me. True, none of us knew anybody personally, but just having a local with me was getting me special treatment, is it any wonder that Western companies that come parading into China with the best of their western minds fail miserably?