In the context that social and economic change promotes guanxi complexity in China, our study shifts research attention from the often-examined development to the diminishment of guanxi relations. By examining increased elasticity of guanxi relationship, conflicting ethical beliefs, and changing nature of Chinese society, we discuss how guanxi dyadic relations at workplace are subject to diminishment when one focal party discovers the unethical practices of the other, as well as how the focal party’s heritage of Confucian values moderates the process. This effort contributes to the literature of guanxi and business ethics and stimulates research on guanxi change in China.