Guanxi (gwan-shee), the Chinese term for mutually beneficial relationships essential to success in the Middle Kingdom, tells the story of the juggernaut research lab that underpins Microsoft's relationship building in China. Unfurled through a gripping narrative that moves between Beijing and Microsoft headquarters in Redmond, Washington, it follows the lab's emergence as a mecca for Chinese computer-science talent -- a place where 10,000 résumés arrive in a month, written exams are farmed out to eleven cities to screen applicants, and interns sleep on cots next to their cubicles. So far, the company has invested well over $100 million and hired more than 400 of China's best and brightest to turn the outpost into an important window on the future of computing and a training ground to uplift the state of Chinese computer science -- creating dramatic payoffs for both Microsoft and its host country that are helping the company overcome many of the challenges of China.

Guanxi traces the arc of the lab's stunning success from a memo by erstwhile Microsoft visionary Nathan Myhrvold to its early days under maverick speech recognition guru Kai-Fu Lee (since plucked away by Google for some $10 million), and to its more recent tutelage under former child prodigies Ya-Qin Zhang and Harry Shum. The two China-born stars, who both attended college in their native country by the age of thirteen, have orchestrated the Beijing lab's recent emergence as an epicenter of Microsoft's intensifying battles against Google in the search wars, Nokia in the wireless arena, and Sony in graphics and entertainment.

As pundits rail about the "China threat" to U.S. competitiveness and offer often-hackneyed arguments against outsourcing, Guanxi explores the true ramifications of China's high-tech buildup -- and the means by which it can be turned to competitive advantage, in part by "insourcing" the untapped talent in the country's top universities. Sprinkled with telling observations, compelling characters, and lively anecdotes about the brilliant successes and sometimes painful stumbles of the world's most powerful software company, Guanxi is essential reading for business leaders, entrepreneurs, and technologists around the globe.