He is mainly remembered for his reforms as chancellor under Duke Huan of Qi, as well as his friendship with his colleague Bao Shuya, though his reputation remained controversial among the Confucians,[2] as detailed in the Philosophy and appraisal section.

Through Guan Zhong's reforms and skilful diplomacy Qi became the most powerful of the feudal states and Duke Huan became the first of the Five Hegemons.

Though knowledge of his reforms is limited, in particular he instituted a famous fiscal policy known as "balancing the light and the heavy", associated with salt and iron monopolies.

The Shiji records that, as partner, Guan Zhong often took more than his share of the profits, in effect cheating Bao Shuya.

Subsequently, Guan Zhong was appointed tutor to Prince Jiu, the younger brother of the ruling Duke Xiang of Qi.

In 685 BC, Gongsun Wuzhi himself was killed in another palace coup, and the ministers of Qi sent envoys to Ju, hoping to receive Prince Xiaobai back and succeed to the duchy.

Xiaobai pretended to cough blood and collapse, tricking Guan Zhong into thinking he was mortally wounded.

Duke Huan had inherited a state in turmoil, after three years of civil wars and usurpation had severely depleted the treasury.

Economically, Guan Zhong disbanded the well-field system instituted since the Zhou dynasty; instead, all land was to be taxed according to its productivity.

At the same time, Qi's coastal position was exploited through the expansion of fisheries and salt production, while trade was encouraged through certain privileges.

[8] Though actually legalistic philosophy did not develop until hundreds of years later, R. Eno of Indiana University does consider that "If one were to trace the origins of Legalism as far back as possible, it might be appropriate to date its beginnings to the prime ministership of Guan Zhong, chief aide to the first of the hegemonic lords of the Spring Autumn period, Duke Huan of Qi (r.

[13] Guan Zhong is reported to have advised Duke Huan: 'Summon the wavering with courtesy and cherish the remote with virtuous conduct.

When Duke Huan was approached to dethrone the ruling clans of his state, Guan Zhong advised him that he had won their adherence through politeness (li) and trustworthiness (xin).

Duke Huan often listened to Guan Zhong's sound advice such that his status amongst other Zhou vassal states rose.

He believed that monopolizing the nature resources was helpful on improving the government income, with fewer complaints from the public than raising taxes.

In the record of Guanzi Chapter 84, Duke of Huan wanted to restrain the threat from State of Hengshan (衡山国) and asked Guan for solution.

One year later, Guan ordered officials to buy rice from State of Zhao, at a price more than three times higher than normal.