The Importance of Guanxi for businesses in China
Guanxi, a special word in Chinese, stands for all kinds of relationships, which is one important concept in Chinese culture. In many cases, Guanxi is about connections in social networks that can be used to help accomplish certain objectives or goals one has. Furthermore, it emphasizes connections one can use for conducting a favour or receiving a favour from the mutual connection. The Chinese word guanxi as stated above, in directed translation means relationship. Guanxi consist of two words, guan and xi. Guan means to close up or a door. Literally, thinking, someone inside the door is known to separate between insiders and outsiders. The word guan is also used to mean doing a favour for someone (Hsu and Saxenian, 29). Xi on the other hand means to extend relationship to another party. The word Xi is used in place of maintaining a long term relationship. With the above definition in mind, guanxi is used to refer to “drawing closer connections with people in order to gain personal relationship with the parties” (Luo, 2007). Guanxi is seen to have originated a long time ago and its exact point in history cannot be traced. All that is known is that the concept has always been in existence to bring people together and helps people who have good social ties. As the saying goes “reciprocity respect for hierarchy, and the ritual materialization of sentiment.” People are not treated equally in this traditional society so they start to depend on important people. Indeed, under this philosophy, Chinese strive on managing their guanxi with special persons in hope of better opportunities. Finally yet importantly, in Confucianism, guanxi network is dedicated to building harmonious relationships...
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...he ideas through dialogue and building relationship, both parties agree and on terms that enhance both parties to benefit.
The result that China and the Chinese people have had in building business and trade relationships have influenced people in most developing countries. It has compelled and forced some of the developing countries to change their policies and strategies relating to terms and conditions in business and trade within governments and the residents of those countries. Some countries in the so called developed world that relied on giving other people aid under strict and unfavorable terms and conditions have now resulted into using Guanxi to look for partners to conduct and trade with and the citizens, as well. They see the success and the impact that it has had 0n the Chinese people and in terms of trade and business and they have resolved to copy
Fan, G., and X. Zhang. "How Can Developing Countries Benefit from Globalization: The Case of China." Eldis. N.p., n.d. Web. 20 Apr. 2014.
Bearing in mind that the threat of China’s dependency on imports of natural resources has the potential to threaten the official ideology of Confucianism, the real threat is to the interests of the state and the Communist Party of China, because the future of the party and stability of the country is dependent on the continued growth of the Chinese economy. Maintaining the flow of raw materials is the main objective of the PRC because without them the economic engine of the China would be at a stand still, which has the potential to be seen by the people of China as a weakness and flaws in the current governing system. China should continue developing trade relations and international connections because the PRC has been remarkably successful in creating a network of countries who will be loyal in business and political reform. China has has a strategic focus on building relations with nations whom America is not keen on. This has also perpetuated the realization the the Chinese system of governance provides a second option to the ‘Western Consensus’, as a viable means for successful economic growth coupled with strict government control. China must operate multilaterally to continue the trajectory of relation and loyalty building in other countries. This will assist china with the key pillar goals of, building a comprehensive national power; advance incrementally in order to consolidate a position of strength, and maintaining stability, and with the objective that China will be in the position to continue imports of raw material to Chinese industry in the event of a sea trade embargo from opposition countries like the United...
Confucianism is a Chinese ethical and philosophical system developed from the teachings of the Chinese philosopher Confucius (Shubro). The core being humanism, is believing that human beings are “teachable, improvable and perfectible through personal and communal endeavor especially including self-cultivation and self-creation.” ("Confucianism,") Confucianism emphasizes the importance of the family, reverence for elders, rituals, and the value of education. The Chinese people who follow the Confucianism tend to be very traditional and extremely well known in the society or the elite class. They focus more on education and show great respect towards their family and friends and elder persons. The bond among it’s followers tends to be very strong in nature believe on moving forward together.
China’s trade with the world grew substantially in the first three decades of the 20th century, marking a historic time for the country. In the 1840s, the Chinese economy was strongly closed; however, when Great Britain and other powerful countries pressured their economy, China was willing to open international trade within their own economy. Over the next 60 years, China experienced a small opening of trade amongst other foreign powers, allowing transactions amongst foreigners allowed. The funded railroad aroused industrialization, as well as publicity and overseas shipping (Yan, 2014). The main reason for moderation in China is because they are so much more focused on production rather than consumption. Last year, China’s consumption accounted for 35 percent of their economy; a little over 10 years ago, it was rated that 50 percent accounted for their overall consumption (Reich, 2010). Foreign exports and imports arose dramatically, increasing the yearly expansion rate of trade to about 7.4 percent. The Chinese economies share in world trade grew a little under 2 percent from the late 1800s to the mid 1900s. By the early 20th century, comparative advantage was presented all throughout their economy (Yan, 2014).
China has a list of problems while maintaining one fifth of the world’s population. It covers around the same geographic area as the United States, but has twice the amount of problems, along with five times the amount of people. They have not had a lucrative past, and their future does not either. In order to fix such problems, the Chinese government has taken miniscule actions to further aid their country (Riley, China’s Population).
Confucianism, one of the most renowned Chinese ideologies, was begun by Confucius, a Chinese scholar born in 551 B.C. At the time of his birth, there was crisis and violence occurring in China. In order to combat this problem, Confucius came up with the five relationships. Following these “relationships” (ex. Ruler and subject, older brother and younger brother) would help to establish harmony between all. The majority of these relationships pertained to family matters, which went hand in hand with Confucius’s stressing of filial piety, or respect shown by children for their parents and elders. This single value led to many changes in people’s daily life and attitudes.
For the past twenty-five years, China has witnessed an overall increase in its domestic growth (Fischler 148). According to the article, “The Rise of China as a Global Power,” by Dr. Rosita Dellios, China “is the world's fourth largest trading nation, rising from 32nd in 1978 to 10th in 1997.” Similarly, China’s GDP is also second to the United States of America, generating 13 percent of the world’s output (Dellios). Since China’s introduction into the World Trade Organization in December 2001, its average tariff dropped from 41 percent in 1992 to 6 percent in 2001, becoming one of the most open economies in the world (Dellios). China is also the world’s fastest developing economy, obtaining an annual growth of 9.5 percent through foreign direct investment, low labor rates, emerging markets, and growth expansion. (Dellios). Therefore, the 21st century has been titled the “Chinese Century”, as China has become the second-largest international economy in the world (Ji-lin 15).
In 1972, President Nixon visited China, and declared the open trade between America and China, a country that has been isolated from the West since 1949. Although most people remember President Nixon with his Watergate Scandal, he also opened a new trading era with People’s Republic of China. Nixon was in fact known as an anti-communist, and his presidency was during the Cold War, a political and military tension era between the US and the Soviet Union. In 1949, Chairman Mao Zedong established the People’s Republic of China. Known as a communist, Mao at that time was Stalin’s biggest supporter. China’s alliance ...
However, the impact it has made on China can be considered to be great as it brought China under the limelight in the global economy. Globalization has had many positive and negative ramifications on the Chinese economy. In the short run, it may be so that the negative impacts outweigh the positive impacts, but that is easily debatable. This is because all the negative impacts of globalization can be corrected with economic policies that can be efficiently undertaken by the Chinese government. In this manner, China in overall will be able to enjoy all the benefits of globalization and contribute more to the rest of the world as it continues to grow economically and socially. In today’s world, globalization is an important part of the development and prosperity of each nation and China too should be able to reap from its benefits. Today, as China proudly holds a place in the global economy as the world’s second largest economy and most populated country in the world, it can be said
Worden, Robert L., Andrea Matles Savada, and Ronald E. Dolan. China: A Country Study. Washington, D.C.: Federal Research Division, Library of Congress, 1988. Print.
With the development of China, the economy of China has become the World’s second largest after the US. On the other hand, the ...
From the 1970s, there has been a wave of liberalization in China, which was introduced by Deng Xiaoping. This is one of the key reasons to the rise of China to be one of the economic giants in the world. In the last 25 years of the century, the Chinese economy has had massive economic growth, which has been 9.5 percent on a yearly basis. This has been of great significance of the country since it quadrupled the gross domestic product (GDP) of the country thus leading to saving of 400 million of their citizens from the threats of poverty. In the late 1970s, China was ranked twentieth in terms of trade volumes in the whole world as well as being predicted to be the world’s top nation concerning trading activities (Kaplan, 53). This further predicted the country to record the highest GDP growth in the whole world.
Over the last 3000 years, China has had many inspirational leaders who have greatly influenced China's economy, literature, and philosophy. Not only have each one of China's historical and contemporary leaders had an impact on China as a nation, but many of their ideas have flourished throughout literature which has allowed other countries around the world to attain those ideas and learn from them. One of China’s great leaders whose ideas, theories and philosophical ponderings have had a great impact on China's ancient and modern day societies is Master Confucius. Confucius has inspired the literature of modern and ancient China through important books which are still being read by Chinese authors today. Moreover, Confucius has had many achievements which have revolutionized philosophy in contemporary China through his philosophy of “The Five Relationships” which teach us truth to being human. Lastly, Confucius has had a major influence over religion throughout China's ancient age, as his religion known as Confucianism, is still being pursued today by many people in China. Confucius is evidently one of the most significant and important people ever to exist in ancient China.
In the race to be the best, China is clearly outperforming the United States. China has strong economic fundamentals¬ such as “a high savings rate, huge labor pool, and powerful work ethic” (Rachman, Gideon. "Think Again: American Decline). Their economy has grown an astonishing 9-10% over the past thirty years; almost double of what it used to be decades ago. China is also the “world’s greatest manufacturer and its greatest market” (Rachman). The continuing growth of China's economy is a source of concern for not only the U.S. but surrounding nations as well. One could argue that the U.S. need not worry about China’s growth because of the spread of globalization and that western ideologies would influence China to turn to democracy. Yet China has still managed to “incorporate censorship and one party rule with continuing economic success” (Rachman) and remains a communist country. Hypothetically, even if China does resort to a democratic state, this does not gua...
with each other, working in agreement for the good of the person as a whole. In