Negotiation literature suggests that contentious group distinctions between negotiators result in cognitive biases, which in turn lead to counterproductive negotiation behavior and low joint-gains. However, despite political tensions and cultural divergences between China and Taiwan, there is significant Taiwanese investment in China. This paper hypothesizes that guanxi between Taiwanese and Chinese negotiators counteracts the expected group-related cognitive biases and aids trust formation and value creation between negotiators. Interviews with Taiwanese negotiators working in China lead to an account of guanxi’s role in cross-strait business negotiations and an emic model of guanxi.