The significance of Guanxi Free Essay Example

There feelings of ambivalence towards foreigners some distrust and aloofness pulling against their attraction for material things which developed countries can offer, they can be enthusiastic about proposals and foreign products one moment and then the next turn defensive about Chinese superiority the next. Bringing these observations to light shows the complex nature of people from different regions. These observations are carefully recited by foreigners wishing to do business in China. They do this to attract and maintain good relationships with the Chinese.

The relationship is not just between companies but also between individuals at a personal level. The relationship is not just before sales take place but it is an ongoing process. The foreign company has to maintain the relationship if it wants to do more business with the Chinese. To conclude Guanxi has its advantages as well as disadvantages. Underhanded help can often prove quicker and cheaper alternatives to following formal procedures. Although when something goes wrong, the relationships are challenged and could quickly disappear.

Guanxi can also be very one sided.

Where Guanxi is involved, there is a risk of having to repay a favor twice the amount you bargained for. What many people fail to realise is that every country has its unique cultural differences. Everybody is culturally bound and is limited in his/her own knowledge of other cultures (QING CAO 2007). What is classed as different to the English society may be common unwritten procedures in china. If we sick by our translation then does this ‘connection’ and ‘relationship’ find its way into every business practice? If this is the case what makes Guanxi distinguishable as Chinese?

Is it not a true saying that money speaks the same language therefore Guanxi is irrelevant? The subject has proven to be very ambiguous in defining.

To say that Guanxi is insignificant would be false, but with the increased accession into a market economy, I believe Chinas dependency on Guanxi will ease. With China joining the WTO they are making huge efforts to modernize their legal structure. In China today powerful economic enterprises are paying more and more attention to the laws, rules and regulations that are part of the emerging newly developed Chinese state. Guanxi posses more questions that it answers.

All I can conclude is to call attention to what Guanxi is, but not to why it accurse. That is a question for political scientists, which I am not. The significance of Guanxi is dependant on who you are and what you hope to gain from China. Try as we might to try and compare it to something a little closer to home. I believe Guanxi is truly unique to China.

Reference

1. Burns R. (1998) Doing business in Asia Addision Wesley Longman Austrailia Limited
2. Geoffrey M. (1994) Doing Business in China. China Library
3. Gulati D., A and Lee Y. A kellogg on China. Kogan Page Limited
4. Gutherie D. (1998) The significance of Guanxi in chinas economic transition, The China Quarterly, pg 255
5. Revuvid J. and Yong L. (2005) Doing business with China. Kogan Page Limited
6. Guanxi and social network theory [online]
7. Bibliography China-Britain Business Council (2005) China Guide: Business & Culture [online]
8. Gouldner A. W. (1960) The Norm of Reciprocity: A Preliminary Statement. American Sociological Review, 25/2: 161-78. HODDER, R. (1996) Merchant Princes of the East. John Wiley and Sons.
9. Kenna P. and Lacy S. (1994) Business China: A Practical Guide to Understanding Chinese Business Culture. Passport Books.
10. Monk P. (2002) ‘Coming to the party Transparency in the political and economic life of China,’ Australian Review of Public Affairs, 26 August.
11. Revuvid J. and Yong L.. (2005) Doing Business with China. 5th Edition. GMB Publishing Ltd.

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