Chinese language has many words for the entertainment of a guest: jiedai (接待) is a simple general form; yanqing (宴请) already suggests that such occasions involve a feast or a dinner, while yingchou (应酬) hints that the courtesy of these practices could include gifts and materialistic benefits.
When old friends of equal status meet, social pressure and a need to spark up warm feeling with wine are very much alive, but at each person has some flexibility to refuse a drink (jujiu拒酒). In certain job posts, however, being able to drink, elevate one's mood through liquor and encourage others to drink are not essential to the work culture.
An article about this topic published by the Chinese Sohu portal describes the story of a former teacher who was admitted to be the vice village chief. He wasn't aware at the time how much entertaining he would have to do, and how alcohol would shape his lifestyle. The thin man maintained his balance for a few months before he collapsed and found himself in the hospital regretting every drop of alcohol he consumed. Finally he acknowledged that while 'alcohol belong to the public/state, his life belongs to him only' (‘酒是公家的，命是自己的' jiu shi gongjia de, ming shi ziji de).
A different story in the article further highlights the business importance of drinking: A head of a certain municipal department was in need of a budget of 1 million RMB for a certain project. The high official in charge of budget division had already given a general agreement to the transaction, but the two still met for dinner, making things more official and pleasurable. After about two hours of drinking, the chubby high official ordered 10 more bottles of baijiu (distilled alcoholic drink made of sorghum) announcing to the astonishment of his (already drunken) dinner partner that only if the latter drinks all 10 bottles shall the 1 million RMB be given, for each bottle left full, 100,000 RMB would be deducted from the budget.
'Alcohol culture' (jiu wenhua) is an essential part of the Chinese manly labor sphere. Nowadays quite a few job recruitment (zhaopin) ads state specifically that a candidate must have a decent drinking capacity (yiding de jiuliang). After all, how can important guests be impressed if the company's representative cannot walk straight after only five bottles of Qingdao beer?!
Alcohol means business and power, but more directly, alcohol equals emotions (ganqing) and an informal (yet formal) long-standing masculine social tradition of softening social barriers. Wine has been the inspiration of manly encounters for centuries, and the contemporary importance of alcohol strongly relates to such tradition while finding new modern advantages.
Women might join the celebration sometimes but they are hardly required to demonstrate drinking skills. The changing values of the Chinese social landscape might gradually undermine the importance of this 'alcohol culture', favoring health, man-woman equality and new working etiquettes. Still, the political structure of institutes, to power of officials and the importance of guanxi in social relations are enough to ensure several more decades of alcohol breath (jiuqi) for many of China's finest.
While foreigners who have business aspirations in China are not expected to face the same drinking pressure as many Chinese men encounter, long feasts are still important for softening the hand that signs the contract. If one wants to impress his (this would be less effective for women) Chinese host, showing willingness to drink and making the liver accept the presence of baijiu in the body will undoubtedly improve one's business prospects.
Assisting source: 关注公款吃喝：官场“酒文化”酿出了什么, sohu.com