Guanxi, How China Works

Yanjie Bian

• Publisher: Polity
• Year: 2019
• ISBN:
  9781509500420
• Edition: 1
• Topic: Business
• Subtopic: Organisational Behaviour
• Index: Business

How do social relations, or guanxi, matter in China today and how can this distinctive form of personal connection be better understood? In Guanxi: How China Works, Yanjie Bian analyzes the forms, dynamics, and impacts of guanxi relations in reform-era China, and shows them to be a crucial part of the puzzle of how Chinese society operates.

Rich in original studies and insightful analyses, this concise book offers a critical synthesis of guanxi research, including its empirical controversies and theoretical debates. Bian skillfully illustrates the growing importance of guanxi in diverse areas such as personal network building, employment and labor markets, informal business relationships, and the broader political sphere, highlighting guanxi 's central value in China's contemporary social structure.

A definitive statement on the topic from a top authority on the sociology of guanxi, this book is an excellent classroom introduction for courses on China, a useful reference for guanxi researchers, and ideal reading for anyone interested in Chinese culture and society.

1
What is Guanxi?

What is guanxi? A British social scientist said the following: “Chinese guanxi is not a term which can adequately be expressed by an English-language equivalent of one word, the concept is too culture specific” (Parnell 2005: 35). “How much cultural specificity is there in the term guanxi?” one may ask. Well, it is complicated. This answer, believe it or not, can apply to almost all the questions we have about China. Chinese politics is complicated. Chinese history is complicated. China's market economy is one with Chinese characteristics, so it is complicated, too. What about Chinese culture and society? That is not just complicated, it is a big puzzle that no one really understands! This last statement represents the judgment we frequently hear from classroom instructors teaching about Chinese culture and society.

So, let us start our examination of guanxi with something simple. A simple understanding of Chinese guanxi reduces its cultural specificities and prepares readers for more complicated meanings of the term while reading through the text. In this spirit, I share my 1+3 points about what guanxi is: Guanxi is simply a connection between two individuals, but importantly it is a personalized connection, a subjectively close connection, and a potentially resourceful connection. Let us apply this 1+3 scheme to everyday Chinese life for further elaboration.

Guanxi in Everyday Chinese Life

In a Personal Context

Guanxi is a connection between two individuals. This involves a dichotomy: kin and non-kin (Lin 2001a). Kin connections include ties of immediate family, extended family, close kin, and distant kin. Built upon blood and marriage lineages, kinship networks define structural boundaries for one's kin ties. Non-kin ties, on the other hand, are much broader than kin ties, and their structural boundaries are multidimensional. Any geographic place and social institution to which an individual has ever been attached during his or her lifetime establishes a structural boundary within which to develop non-kin ties. Hometown folks, classmates, comrades-in-arms, work colleagues, and neighbors are a few examples for illustration. But none of these can become or sustain guanxi ties if they fail to meet the following three qualifications: personal, close, resourceful.

Guanxi is a personalized tie. What makes a tie personal? A one-on-one conversation that shares secrets and gossips makes a tie personal. Expressing sympathy or offering care to a hospitalized friend makes a tie personal. Providing help as a favor to a neighbor who desperately needs it makes a tie personal. Saving a colleague from trouble even at one's own risk makes a tie personal. These kinds of scenarios do not occur randomly; only a proportion of kin and non-kin contacts are elevated to the level of personalized ties through events of personal significance. These events include, as we shall see throughout this book, life-cycle events of local significance (Yan 1996) and family emergencies (Chang 2010), events of cultural significance (Bian 2001), career promotion (Wang 2016), and business founding and development (Burt and Burzynska 2017).

Guanxi is a subjectively close tie. Personalized ties are personal, subject to the involved parties’ perceptions of sentimental attachment and obligation fulfillment to each other. Even among kin, biological or role relationships do not automatically generate guanxi between people unless such relationships result in active and intimate interactions in the personal worlds (Kipnis 1997: 7). In this sense, Sahlins's (1965/1972) notion of “social distance” applies to both kin and non-kin ties in how they perceive each other. When these perceptions are mutually high, a guanxi tie is sustained; otherwise the accumulated problems may lead to the dissolution of a guanxi tie. The highest point of guanxi is when the two parties maintain mutual perceptions of familial sentiments and obligations to each other (Fei 1947/1992; Liang 1949/1986). That “master–apprentice relations are equivalence to father–son relations” (师徒如父子, shitu ru fuzi) is a well-known example of the point.

Finally, guanxi is a potentially resourceful tie. Personalized ties are expected by the parties involved to facilitate exchanges of favors for expressive and instrumental purposes. While expressive purposes are interactions intended for the emotional and psychological gains of the parties involved, instrumental purposes are the exchanges of tangible and intangible resources that benefit one or both parties in social interaction (Lin 2001b). In a guanxi tie, one is able to prevail upon another to perform a favor, and vice versa. The two parties need not be of equal social status (Yan 2006), but they must have access to non-redundant resources to satisfy the exchange of favors (Bian 2010). Failure to reciprocate a favor is a violation of mutual obligation and hurts sentimental feelings. Therefore, a close personal tie may quickly lose its instrumental value when the two parties are completely redundant to each other. This is especially so for career-driven people (Feng 2010). Among retirees and the elderly, close personal ties keep together resource-redundant people for expressive favor exchanges.

In a Business Context

Economic actors are socially embedded (Granovetter 1985). In Chinese guanxi culture, this has two important implications. First, it is the well connected who do business with each other and do it well. That is, entrepreneurs who have guanxi ties to resourceful others are likely to start a business and operate it to a respectable level (Bian and Zhang 2014). Second, poorly connected entrepreneurs who have bright business ideas must cultivate guanxi ties to resourceful others in order to convert and capitalize their ideas into profitable business operations (Zhang 2016).

Prior guanxi ties before business are of fundamental importance for new ventures to emerge. They are the support networks to obtain business opportunity, mobilize financial capital, and recruit core members of the business team (Bian 2008a). Lacking prior ties of this nature can be frustrating for foreign businesspeople i...