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Business Networks in China: Guanxi and Guanxiwang


One can often hear the word guanxi in any Chinese community, whether it is mainland China, Hong Kong, Singapore or Taiwan, though there may be some slight differences in pronunciation as a result of the distinctive Chinese dialects.

In China, Guanxi has been regarded as a special relationship two persons have with each other, as a special kind of personal relationship in which long-term mutual benefit is more important than short-term individual gain, and as having the status and intensity of an on-going relationship between two parties.

While guanxi operates on a dyadic level, guanxiwang(Network) certainly goes further than that. Guanxiwang refers to a network of exchanges or transactions between two parties and beyond. Goods and services such as physical products or favours exchanged can be anything of value and mutual benefit to the parties concerned, for example, raw materials, promotion, gifts, information, facilitation and so on. Guanxiwang obtains when one set of separate, personal and total relationships between two individuats, A and B, and another set of such relationships between B and C are interlinked through the common agent, B, acting as a witness and facilitator. As a result, the originally total and personal relationship transforms into a complex network of social exchanges with such interlinkage extended into other sets through numerous common agents like A, B and C. Therefore, it can be concluded that guanxi is not simply, as many believe, one of the key features of Chinese culture or one of the key 'themes' which depict cote aspects of Chinese values, it is the mother of all relationships.

There is a bias in the study of Chinese business networks. Although there exists much corruption among overseas Chinese. However, when it concerns mainland China, guanxiwang is immediately branded as corruption. Many people often treat Guanxi and guanxiwang as derogatory terms. Guanxiwang is regarded as an unhealthy social tendency. The truth is guanxiwang per se is purely a form of organisational governance. Nothing more, nothing less. It has nothing to do with corruption when a transaction is legal and does not infringe any public interests, but simply takes place between members within a business network. Guanxiwang only becomes corrupt when exchange or transaction taking place within a guanxiwang involves corrupt activities such as bribery. Because of the special characteristics of guanxiwang such as trust and bonding, corrupt deals are more likely to rake place between members of a guanxiwang particularly when an adequate and effective legal and disciplinary system is lacking.


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