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«Inaugural-Dissertation zur Erlangung des Doktorgrades des Fachbereichs Wirtschaftswissenschaften der Johann-Wolfgang Goethe-Universität Frankfurt am ...»

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dence in their credibility, competence and reliability‖. It depends on the law to bind a contract, whereas in China default is prevented by a person‘s reputation.973 The Chinese version of trust is referred to as Xìnyòng (信用, use or usefulness of trust, but also credit). ―It refers to credibility, integrity, trustworthiness or the reputation or character of a person and in business circles it refers to a person‘s credit rating‖.974 Possessing Xìnyòng and being trusted means that a certain behavior is anticipated and thus, that the rules of Rénqíng are followed.975 Thus, it is a cultural concept with strong ethics, and serves also as ―a means for disciplining not only others but also oneself‖.976 Guanxi is built on pre-existing links to people with whom a shared identity exist, like those from the same regional origin, classmates, co-workers, or people known from the military or university, creating fictitious quasi-kin-relationships.977 The difference to interpersonal relations in general is that ―this commonality of shared identification distinguishes kuan-hsi from ordinary social action. Kuan-hsi have quantifiable strength‖.978 It enables ―strangers [to] enter into a meaningful and sustainable social relationship‖.979 These Guanxi relations are also so-called ‚tong-relationships‘ (同,alike, similar and co-, as in coworker, 同事, tóngshì).980 and can also be described as ―concentrical Guanxi circles‖, extending from the family as core reference point to extended zones.981 Especially for people in rural areas Guanxi is more than just networks of personal relations; it rather constitutes ―the very foundation of the society‖.982 Guanxi is always based on personal relationships which are not transferable and are often used to influence others. Guanxi is a process of inventing and re-inventing relationships as ongoing ―social engineering‖.983 It becomes a ―cultural metaphor that enables people to imagine and position themselves in new relationships‖ which has particularistic origins but is ―nevertheless applied generally and broadly beyond the confines of primordial relationships‖, creating a ―generalized particularism‖ and a unique form of civility.984 Wang; Siu and Barnes, 2008, p. 820, 823.

Kiong and Kee, 1998, p. 85.

Wang; Siu and Barnes, 2008, p. 823. In Wank, 2008, p.105, Xìnyòng relations between entrepreneurs (hence, credit relations) are differentiated from Guanxi relations. The first are conceived as objective evaluations of price and quality between partners of equal status, whereas the latter depends on Gănqíng and Rénqíng and often is associated with power asymmetries.

Hu, 2007, p. 60f.

Whyte, 1996, p. 12, Jacobs, 1979, p.243-253, 259 and Yang, 1988, p. 49 and 411.

Jacobs, 1976, p. 80f.

Lo and Otis, 2003, p. 132.

Chen and Chen, 2004, p. 311.

Peng, 2004, p. 1049.

Yan, 1996a, p. 2.

King, 1991, p. 69.

Lo and Otis, 2003, p. 132.

The Chinese society is neither group- nor individual-based, but rather ―based on interpersonal relationships‖.985 As to Chinese ―human life is a complex web of relations with the world, relations with the mind and relations to others‖986, Guanxi is also embedded in most functions of everyday life, including political alliances, recreational and economic activities.987 There are no separate networks for business relations. More than that, ―it seems that the Chinese are not used to compartmentalizing the different roles that they have with others and so treat the other person according to the requirement of the current role‖.988 In contrast to most Western countries, there is no separate morality and different rules for business in China. Business affairs and private life are not detached, with separate behavior for each sphere. In So and Walker, 2006 a manager of a large Chinese company describes that ―one of the primary differences in the Chinese and Western ways of doing business could be traced to the fact that in the West business developed its own culture separate from private or personal culture, with a different set of rules and a character of its own. This is also expressed in the notion of xiaowo and dawo, the private individual self and the larger collective self, respectively. The first should be constantly improved and cultivated, whereas the latter embeds the xiaowo in society. Both are inseparable and shaping each other. Both selves use different forms of Rénqíng for communication, a more official form of polite Rénqíng that serves as universal code for correct behavior and a more tacit, indirect version of gift exchange below the surface of ―politeness and gallantries‖.

The interdependent relations of the both selves cannot be analyzed by the dichotomous Western concept of private and collective.989 Hence, in the Chinese context there is no separate morality for business. There are no separate rules that divide the conduct of business from that of personal affairs, in which the key factor is proper human relations. A successful business relationship between Chinese companies begins with the establishment of a personal bond between the principal managers of the companies and is based thereafter on the careful maintenance of these personal ties‖.990 Guanxi at the same time considers societal ethics and individual utility, however conflictive this may be. Business partners balance on a knife‘s edge between friendship and profit, altruism and rivalry, social harmony and competitive advantage.991 Hu, 2007, p. 55.

Zhu, 2007, p. 1505.

Mauss, 1966, p. 1-3, 36f.+76-78. See also Yan, 1996a, p. 8f.

So and Walker, 2006, p. 4.

Nojonen, 2007, p. 64.

So and Walker, 2006, p. 4.

Souchou, 2002, p. 238.

This goes as far as not developing Guanxi with a particular person at all to avoid the mutual commitment because ―it is not possible to behave in very different ways when acting in different roles in relation to the same person‖.992 Accordingly, there is also the wish for harmony on the private and societal level which is prioritized over individual liberties.

Consensus and co-operation are preferred to confrontation. Traditionally, the individual perceives itself as part of a whole that hinges on mutual support and respect. It is a hierarchical-patriarchal model found within the family but also vis-à-vis the state.993 A Chinese individual typically defines itself ―in relation to others (within the family)‖ which ―results in greater tolerance of others, greater self-discipline, and in a constant concern for preserving harmony with others‖.994 However, although it is mostly the family which is particularly important for starting a business, also non-kin can be included if people are seen as family-like and if they can be trusted because long-term relationships based on Gănqíng exist.995 Thus, the core group, even of larger enterprises, consists often in family members or good friends.996 On a general level, Guanxi can be compared with the theory of social capital, outlined above in chapter 3. However, when examining both concepts more closely, it becomes clearer that Guanxi is an ―indigenous Chinese category‖ that includes mutual obligations, indebtedness in a reciprocal relation.997 This constitutes a structure that is more than ―simply an issue of social embeddedness and social connections; it is a system of gifts and favors…and there is no time limit on repayment‖.998 It can be said to be most similar to Bourdieu‘s concept of social capital, in that it needs continuous efforts to be maintained. It differs from his as well as all other concepts presented in chapter 3 in that it is not oriented towards immediate utility in the present or future. It further differs from Putnam‘s definition, which claims that social capital is manifested in civil engagement and membership in clubs, parties or other associations and thus is rather formal in nature. Guanxi in contrast is based purely on informal relations, as has been elaborated in detail above. The concept of Guanxi differs most starkly from the more economic interpretations of Coleman, Burt and Dasgupta of social capital. In contrast to Coleman‘s assessment of social capital, Guanxi is neither a public good, nor can it be accumulated by corporations or collectives. It is also So and Walker, 2006, p. 5.

Pohl, 2002, p. 114f.

Joy, 2001, p. 240.

Yang, 1988, p. 409+411 Krug, 2002b, p. 139f.

Yan, 1996b, p. 14.

Gold; Guthrie and Wank, 2008a, p. 7. See also Bourdieu, 1997 [1986], p. 52: ―The existence of a network of connection is not natural given, or even a social given…It is the product of an endless effort at institution‖.

not a static concept, as Fukuyama claims. However, Guanxi is still a form of social capital in the sense that is a moral resource and a sum of social relations and informal rules that facilitates co-operation within society.

6.1.2. Traditional Guanxi: the rural Rénqíng gift economy

–  –  –

Guanxi network can take on a more moral form or be more instrumental in purpose, which is often also a matter of geographic placement as there seems to be a strong dichotomy between rural and urban networking behavior. The first is a more traditional form of Guanxi, whereas the latter is mainly used in business practices. Clearly, this dissertation does not imply that Guanxi can be reduced to a traditional vs. modern or rural vs. urban type, but the distinction is useful to elucidate the various functions that Guanxi can have in Chinese society.1000 However, the traditional form, typically taking place in rural areas, is a more morally bound exchange network, ―reproducing [itself] through an endless process of gift-giving‖;

the urban one is more an instrument to construct ―webs of particularistic ties‖1001 to serve economic goals. This means that for the first kind the Rénqíng rules are more important, whereas for the other it is the more instrumental Guanxi that regulate people‘s behavior. It is also worth noting that Rénqíng is traditionally more exercised by women, because they tend to be more attentive to obligations, debts and reciprocities in interpersonal relations, whereas men often tend to the more instrumental art of Guanxi, found also in business relations, serving as a substitute or at least as a facilitation of market relations.1002 The traditional type of Guanxi consists of an exchange network that strongly depends on mutual gift-giving, reminding of the ancient gift-giving economy. It is important to keep in mind that Guanxi customs differ among regions.1003 In this analysis, I will mainly use a case study done by Yunxiang Yan in a Northern Chinese village1004, which provides Yang, 1994, p. 115.

Kipnis, 1996, p. 286f.

Yan, 1996a, p. 2.

Yang, 1994, p. 312 and 320.

Yang, 1994, p. 312.

Yan, 1996a.

a specific example but hopefully also serves as instrument to illustrate the traditional form of Guanxi.

In general, kinship ties and a tradition of mutual assistance and obligation are of great importance on the countryside. More than just being networks of personal relations, Guanxi rather constitutes ―the very foundation of the society‖.1005 Economic gains are only a small part of the significance of Guanxi but rather an essential part of rural human existence. Either individuals have personal relations – then they are part of society (shèhuì shàng de rén, 社会上的人, people in society). They are considered ―dead doors‖ (sǐ ménzi死门) if they are not actively participating in creating personal connections and therefore are not at all involved in social exchange and therefore part of society.1006 It is important to establish networks with a large number of people who may vary in social and occupational position as well as geographical location.

Within rural Guanxi, Yan differentiates three different local categories of Guanxi. The personal core entails the closest family, a reliable zone which consists of good friends and less close relatives and an effective zone of friends and family in a broader sense.

In the first one only immediate family is part of the ‗inner circle‘. Being a member of that is linked to mutual duties and rights. The people who belong to the reliable zone can be counted on for help; the distinction to the personal core is not always entirely clear defined. Also neighbors and non-kin relations of equivalent status can be found within this zone. The last one is the one that is open to recruitment, and is often used for economic purposes, especially to interact with strangers outside the village community, subsuming also ―non-kin superior-subordinate relations‖.1007 Of course, Guanxi is not a static structure but a dynamic process which requires engagement and social exchange to keep up with existing relations, redefining, adjusting and creating relations every day. Practically, this is mostly done by gift-giving, which has often, but not always, the function of a ritual and is strongly routinized. A personal network consists of shou rén (首任) - familiar persons - and Guanxihù (关系户) - a Guanxi household. The latter is understood as a person to whom an obligation has to be fulfilled. Shou rén are individuals from whom favors can be asked.1008 Networks are defined and visible through the ritualized gift-giving. The number of gift-givers shows its size because everyone within one‘s Guanxi network is obligated to offer a gift at certain occations. The size Yan, 1996a, p.2 and similar in Kipnis, 1996, p. 290f.

Yan, 1996a, p.8.

Yang, 1994, p. 111.

Yang, 1994, p. 64.

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