Guanxi Bases, Xinyong and Chinese Business Networks

Abstract

This chapter focuses on personalism, elaborating on the three key elements—guanxi, xinyong, and personal control. It takes a critical view of the culturalist explanation for Chinese business success and the inferred disparity between an idealized, static model of the three concepts and that of how guanxi and xinyong are dynamic concepts and how they actually play out in the reality of running a firm. The chapter also makes a key distinction of guanxi bases as a necessary prerequisite but not equivalent to guanxi relations, in the process identifying six main guanxi bases—locality/dialect, fictive kinship, kinship, workplace, trade associations and social clubs, and friendship. It suggests that a multiplex of guanxi relations facilitates better business ties than singular strands. The chapter explores the difference between personal trust and systems trust. It stresses the need to consider institutional and environmental elements that may shape the organization of Chinese firms rather than just the organization per se.