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For the autonomous region, see Guangxi.
For the township in Hsinchu County, Taiwan, see Guanxi, Hsinchu.
Traditional Chinese 關係
Simplified Chinese 关系

Guanxi is the basic dynamic in personalized networks of influence, and is a central idea in Chinese society. Although it has a long history as a Chinese cultural phenomenon, the term is not clearly defined in literature. In Western media, the pinyin romanization of this Chinese word is becoming more widely used instead of the two common translations—"connections" and "relationships"—as neither of those terms sufficiently reflects the wide cultural implications that guanxi describes.[1]

Guanxi largely originates from the Chinese social philosophy of Confucianism, which stresses the importance of associating oneself with others in a hierarchical manner, in order to maintain social and economic order. Particularly, there is an emphasis on implicit mutual obligations, reciprocity, and trust, which are the foundations of guanxi and guanxi networks.[2]

Closely related concepts include that of ganqing, a measure which reflects the depth of feeling within an interpersonal relationship, renqing (人情 rénqíng/jen-ch'ing), the moral obligation to maintain the relationship, and the idea of "face" (面子, miànzi/mien-tzu), meaning social status, propriety, prestige, or more realistically a combination of all three.

Guanxi has a major influence on management-based businesses in China, and on those owned by overseas Chinese in Southeast Asia, also known as the bamboo network.[3]

Description and usage[edit]

Guanxi in a personal context[edit]

≤≥/At its most basic, guanxi describes a personal connection between two people in which one is able to prevail upon another to perform a favor or service, or be prevailed upon. The two people need not be of equal social status. Guanxi can also be used to describe a network of contacts, which an individual can call upon when something needs to be done, and through which he or she can exert influence on behalf of another.

Guanxi refers to the benefits gained from social connections and usually extends from the extended family to school friends, workmates and members of common clubs or organizations. It is customary for Chinese people to cultivate an intricate web of guanxi relationships, which may expand in a huge number of directions, and includes lifelong relationships. Staying in contact with members of your network is not necessary to bind reciprocal obligations. Reciprocal favors are the key factor to maintaining one’s guanxi web, while failure to reciprocate is considered an unforgivable offense (that is, the more you ask of someone, the more you owe them). Guanxi can perpetuate a never-ending cycle of favors.[4]

The term is not generally used to describe interpersonal relationships within a family, although guanxi obligations can sometimes be described in terms of an extended family. Essentially, familial relations are the core of one’s interpersonal relations, while the various non-familial interpersonal relations are modifications or extensions of the familial relations. The term is also not generally used to describe relationships that fall within other well-defined societal norms (e.g. boss–worker, teacher–student, friendship). The relationships formed by guanxi are personal and not transferable.[5]

The five cardinal virtues play an integral role in determining behavioral guidelines and understanding guanxi and include: emperor-subject, father-son, husband-wife, elder brother-younger brother, and friend-friend. There are two important characteristics that all five cardinal virtues share: 1) every relation has an unequal upper status-lower status structure built in (even in a friend-friend relationship, the two will immediately order oneselves based on age or other determining factors) and 2) there is a hierarchical order among the five cardinal virtues, with the emperor-subject being the highest rank.[6] Extending back to the centrality of family as the core interpersonal relation, the father-son, husband-wife, and elder brother-younger brother are the most important within the five cardinal virtues, after the emperor-subject relation. Last in importance is the friend-friend relation, which is seen as an extension of the familial relations.[7]

Douglas Guthrie distinguishes between guanxi and guanxixue (关系学, the 'art' or 'knowledge' of guanxi),[8] as the former is considered in the modern Chinese society as common inter-personal ties that reflect the Chinese nature, while the latter represents the manipulation and corruption brought about by a selfish and sometimes illegal utilization of guanxi. Although many Chinese lament the strong importance of guanxi in their culture, they still consider guanxi as a Chinese element that should not be denied.

Guanxi in a business context[edit]

In a business context, guanxi can be referred to as the American equivalent of social networking. In China, a country where business relations are highly socially embedded, guanxi plays a pivotal role in the shaping and advancement of daily business operations. Guanxi also acts as an essential informal governance mechanism, helping leverage Chinese organizations on social and economic platforms. Thus, guanxi is important in two domains: 1) social ties with managers of suppliers, buyers, competitors, and other business intermediaries; and 2) social ties with government officials at various national government-regulated agencies. Given its extensive influential power in the shaping of business operations, many see guanxi as a crucial source of social capital and a strategic tool for business success.[9]

This is especially true in countries where guanxi is a prominent part of the culture. Specifically, guanxi allows for inter-business relationships and relationships between businesses and the government to grow as the members of these organizations work with one another.[10] In doing so, businesses receive insider information, raise their awareness regarding specific government policies, and gain exclusive access to resources. Knowing this, some economists have warned that Western countries and others that trade regularly with China should improve their "cultural competency" in regards to practices such as guanxi, to avoid financial fallout due to lack of cultural awareness.[11]

The nature of guanxi, however, can also form the basis of patron–client relations. As a result, it creates challenges for businesses that are obligated to repay favors when they cannot sufficiently do so. In following these obligations, businesses may be forced to act in ways detrimental to their future. They may also start to over-rely on each other, and the tendency of their members to discuss information already known among them becomes greater than the tendency to discuss information only known by select members. If the ties fail between two businesses within an overall network built through guanxi, the other ties comprising the overall network have a chance of failing as well.[12] A guanxi network may also violate bureaucratic norms, leading to corporate corruption.[13]

Note that the aforementioned organizational flaws guanxi creates can be diminished by open market systems that are regulated by formal organizational procedures while promoting competition and innovation.[14]

In East Asian societies the boundary between business and social lives can sometimes be ambiguous as people tend to rely heavily on their close relations and friends. This can result in nepotism in the work force, as it is common for authoritative figures to draw from family and close ties to fill employment opportunities, instead of assessing talent and suitability such as is the norm in Western societies. This practice often prevents the most suitably qualified person from being employed for the position.[15] Although guanxi is associated with the traditional Confucianist doctrine, guanxi ties were strongly developed during the Mao Zedong government (1949–1976), particularly due to the work unit system,[16][verification needed][unreliable source?] which led many workers to construct strong social networks within their units, thus improving their ability to enjoy important resources and privileges.

Guanxi in a government context[edit]

Usage examples[edit]

Someone is described as having good guanxi if their particular network of influence could assist in the resolution of the problem currently being spoken about, and Guanxi is most often used in the Western media when interpersonal obligations take precedence over civic duties, leading to nepotism and cronyism.[17][18]

Ethical concerns of Guanxi[edit]

In recent years, the ethical consequences of guanxi have been brought into question. While guanxi can bring benefits to people directly within the guanxi network, it also has the potential to bring harm to individuals, societies and nations when misused or abused. For example, mutual reciprocal obligation is a major component of guanxi. However, the specific date, time and method are often unspecified. Thus, guanxi can be ethically questionable when one party takes advantage of others’ personal favors, without seeking to reciprocate.[19]

This question is especially critical in cross-cultural business partnerships, when Western firms and auditors are operating within Confucian cultures. Western-based managers must exercise caution in determining whether or not their Chinese colleagues and business partners are in fact practicing guanxi. Caution and extra guidance should be taken to ensure that conflict does not occur as a result of misunderstood cultural agreements.[20]

Other studies argue that guanxi is not in fact unethical, but is rather wrongly accused of being an act that is thought to be unethical in the eyes of the other. Lovett et al. states that just as the Western legal system is a reflection of Western ethical perspectives, the Eastern legal system functions similarly so. Specifically, renqing, or “human feelings”, plays a central role in the Chinese ethical perspective. While Westerners may misinterpret guanxi as a form of bribery, the Chinese recognize guanxi as a subset of renqing, and so recognize any relevant actions as working within ethical constraints.[21]

Similar concepts in other cultures[edit]

Sociologists have linked guanxi with the concept of social capital (it has been described as a Gemeinschaft value structure), and it has been exhaustively described in Western studies of Chinese economic and political behavior.[1]

Cultural Differences in guanxi[edit]

Western vs. Eastern social business relations[edit]

Similar to guanxi, Western relationship marketing involves a mutual, high quality, ongoing relationship between two business parties. The four dimensions of business networking success involve: trust, bonding, reciprocity, and empathy. However, the perspectives in which these dimensions are interpreted and incorporated into business operations are vastly different in the East versus the West.[22]

In the Western perspective, trust is referred to as mutual reliability, dependability, and reciprocity. In the Eastern perspective, trust is synonymous with obligation, in which guanxi is expected to be maintained through continuous long-term association and interaction. Whereas bonding in a Western context may refer simply to common interests with the client, bonding in an Eastern context refers to a close friendship with the client. The Chinese system of wu-lune supports this Eastern attitude, emphasizing that one’s fulfillment of one’s responsibilities in a given role ensures the smooth functioning of Chinese society. Reciprocity is also a dimension which is much more emphasized in the East than in the West. According to Confucianism, each individual is encouraged to become a yi-ren (righteous person) and repay a favor with significantly more than one has received. Lastly, empathy is a dimension that is highly embedded in Eastern business relations, more so than in its Western counterpart. The Confucian understanding of ren, which also equates to “Do not do to others as one does not want others to do to him”, stresses the importance for sellers and customers to understand each other’s needs.[23]

See also[edit]


  1. ^ a b Gold, Thomas, Douglas Guthrie, and David Wank. 2002. Social Connections in China: Institutions, Culture and the Changing Nature of Guanxi. Cambridge: Cambridge University Press.
  2. ^ Luo, Yadong, Ying Huang, and Stephanie Lu Wang. "Guanxi and Organisational Performance: A Meta-Analysis." Management and Organization Review 8.1 (2011): 139-72. Print.
  3. ^ H. W-c Yeung (2007). Handbook of Research on Asian Business. Edward Elgar Publishing. p. 412. ISBN 978-1-84720-318-2. 
  4. ^ Ostrowski, Pierre; Gwen Penner (2009). It's all Chinese to Me: an overview of culture & etiquette in China. Tuttle. pp. 48–49. ISBN 978-0-8048-4079-8. 
  5. ^ Fan, Y (December 11, 2007), "Questioning Guanxi: Definition, classification and implications", International Business Review 
  6. ^ Hsuing, Bingyuan. “Guanxi: Personal connections in Chinese society.” Journal of Bioeconomics 15.1 (2013): 17-40. Print.
  7. ^ Ibid.
  8. ^ Douglas Guthrie. 1998. The Declining Significance of Guanxi in China's Economic Transition. Cambridge: Cambridge University Press.
  9. ^ Hsuing, Bingyuan. “Guanxi: Personal connections in Chinese society.” Journal of Bioeconomics 15.1 (2013): 17-40. Print.
  10. ^ Flora F. Gu, Kineta Hung, David K. Tse. “When Does Guanxi Matter? Issues of Capitalization and Its Dark Sides.” Journal of Marketing 72.4 (2008): 12-28. Print.
  11. ^ Smart, Josephine (September 2012). "Dancing with the Dragon: Canadian Investment in China and Chinese Investment in Canada". 
  12. ^ Flora F. Gu, Kineta Hung, David K. Tse. “When Does Guanxi Matter? Issues of Capitalization and Its Dark Sides.” Journal of Marketing 72.4 (2008): 12-28. Print.
  13. ^ Luo, Yadong (2008-02-02). "The changing Chinese culture and business behavior: The perspective of intertwinement between guanxi and corruption". 
  14. ^ Flora F. Gu, Kineta Hung, David K. Tse. “When Does Guanxi Matter? Issues of Capitalization and Its Dark Sides.” Journal of Marketing 72.4 (2008): 12-28. Print.
  15. ^ Jun, Lin; Steven X. Si (2010). "Can guanxi be a problem? Contexts, ties, and some unfavorable consequences of social capital in China". Asia Pacific Journal of Management 27 (3). 
  16. ^ Guanxi and Guanxixue: The Advantage of Personal Connections in Modern China, Thinking Chinese, July 2010
  17. ^ Cohen, Jerome (December 11, 2007), "A just legal system", International Herald Tribune 
  18. ^ Ansfield, Jonathan (December 17, 2007), "Where Guanxi Rules", Newsweek 
  19. ^ Dennis B. Hwang, Patricia L. Golemon, Yan Chen, Teng-Shih Wang and Wen-Shai Hung. "Guanxi and Business Ethics in Confucian Society Today: An Empirical Case Study in Taiwan." Journal of Business Ethics 89.2 (2009): 235-250. Print.
  20. ^ Ibid.
  21. ^ Steve Lovett, Lee C. Simmons and Raja Kali. "Guanxi versus the Market: Ethics and Efficiency." Journal of International Business Studies 30.2 (1999): 231-247. Print.
  22. ^ Meiling Wong. "Guanxi and its role in business." Chinese Management Studies 1:4 (2007): 257 - 276. Print.
  23. ^ Ibid.

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