The declining significance of guanxi in China's economic transition

While analyses of guanxi have taken a number of different forms and themes, China scholars have, in general, not questioned the centrality of guanxi in Chinese society and everyday life in China. It would be a stretch beyond the empirical data of this research to make generalizations that counter that view. However, it is within the scope of this data to argue that views and perceptions of guanxi are changing in important ways in the urban industrial economy, and these changes suggest a trend that does not fully fit with theories of an increasing role for guanxi and guanxi practice throughout China in the economic transition. Where Yang has argued that the importance of guanxi and guanxi practice is increasing in the reform era, I have argued that this may not be true with respect to the urban industrial economy. Instead, ther is a growing emphasis on the distinction between social relationships and the use of these social relationships in the gift economy and managers in the urban industrial economy are increasingly likely to distance themselves from the institution of guanxi practice in the economic transition. While managers often view social connections as important in business transactions, they tend to generally view the importance of guanxi in market relationships as secondary to the market imperatives of price and quality. In addition, managers do not view the use of connections in China as any different from the way business is conducted throughout the world. Currently, the Chinese government is constructing a rational-legal system that will govern the decision and practices of economic factors. This is especially true for large-scale organizations that are more closely monitored by the state administrative offices than individuals or small-scale entrepreneurs.