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In my limited understanding, guanxi has the taste of corruption, not openness. People doing favors for those they know rather than a free, open, arms-length mar

In my limited understanding, guanxi has the taste of corruption, not openness. People doing favors for those they know rather than a free, open, arms-length market which provides more liquidity and opportunity. Is that wrong?

barrkel 8y ago
People doing favors for those they know rather than a free, open, arms-length market This describes most markets that are not in fungible commodities.
forkLding 8y ago
Guanxi is a broad term and can mean anything from networking (the business kind) to asking about job referrals from friends, you can google the investopedia definition to get a better idea. It can be seen negatively or positively based on the context as in like "he got his job through guanxi" aka he either networked hard (positive) or there was some kind of nespotism involved (negative).
- citrablue 8y ago
  That seems pretty close to how westerners use the term, unless I am missing something? Context matters, I think is what we can all agree on. Unfortunately, in order to agree on the appropriate context, we have to see each other as peers and working for the same goal. (I think this is what's fucked with the current American political system -- it's less "you have your facts, I have mine" and more "you think this context/lens is what matters, I disagree and choose these base assumptions." Naive realism wrote bigly.
  - forkLding 8y ago
    Yep, guanxi is roughly the Chinese word for "connections" or "through the network". I think its perceived more negatively nowadays by the Chinese with 'newish' (more 1990-2000s) terminologies such as the "关系户" (guanxi-hu) which is roughly translated into English as person with a lot of connections and/or is politically savvy and can gain a large advantage in society or conducting business through their network. Note that Chinese govt. (especially the lower rungs) tend to be corrupt/non-transparent and society is more about giving gifts (originally between friends and families, basically bribery if asking for a favour) so this tends to give a much more unfair advantage than Western society (the politically transparent ones). Chinese people (usually media) either think negatively of these kind of people as they see them having an unfair advantage while some respect and aspire to be guanxi-hu because of how well-connected they are.
sfifs 8y ago
Yes. That's how people like Elizabeth Holmes raise a billion dollars and gain a who's who board comprising of famous statesmen without any questions asked, how young son in laws become more powerful than career diplomats and how C- suites always get other C-suite jobs. At least this Chinese version in the electronics is more democratic and let's the little Chinese startup try out things quickly and get into a full commercial relationship if things succeed. I understand American companies used to do this early on but eventually rent extraction mindset took over. But this behavior extending up into actual corruption is very much a current problem for that country
- forapurpose 8y ago
  Did you think that someone was criticizing Chinese culture and it needed defending? And the defense is, there is some degree of corruption based on relationships in other places? Every place sometimes has bad weather too; does that mean the weather is the same everywhere? And does the fact that there is also bad weather in Rome have any bearing on the weather in Edmonton or help the people there? Addressing guanxi seriously: My understanding is that guanxi works against opportunity and the free market; not anyone can get a loan at the bank, for example; instead it requires personal relationships. Economists I've read said the lack of arms-length commercial relationships hold back economic development and opportunity in China, but that was written maybe 20 years ago and possibly things have changed. I do know that Communist Party connections, and particularly connections to the 'royalty', the families of leaders, are highly valuable and are at least sometimes seen as necessary for success in business.
losteric 8y ago
It's not really "favors". The person selling individual chips profits because they don't have the overhead of a formal business. There are open markets for formal businesses, which also expect you to be a formal business ready to purchase large volumes. and, tbh, transparency doesn't matter at low volumes. If someone can afford to carry a prototype to production, the difference between the average and lowest potential guanxi price for a single chip is negligible.

barrkel 8y ago

People doing favors for those they know rather than a free, open, arms-length market This describes most markets that are not in fungible commodities.

forkLding 8y ago

Guanxi is a broad term and can mean anything from networking (the business kind) to asking about job referrals from friends, you can google the investopedia definition to get a better idea. It can be seen negatively or positively based on the context as in like "he got his job through guanxi" aka he either networked hard (positive) or there was some kind of nespotism involved (negative).

citrablue 8y ago
That seems pretty close to how westerners use the term, unless I am missing something? Context matters, I think is what we can all agree on. Unfortunately, in order to agree on the appropriate context, we have to see each other as peers and working for the same goal. (I think this is what's fucked with the current American political system -- it's less "you have your facts, I have mine" and more "you think this context/lens is what matters, I disagree and choose these base assumptions." Naive realism wrote bigly.
- forkLding 8y ago
  Yep, guanxi is roughly the Chinese word for "connections" or "through the network". I think its perceived more negatively nowadays by the Chinese with 'newish' (more 1990-2000s) terminologies such as the "关系户" (guanxi-hu) which is roughly translated into English as person with a lot of connections and/or is politically savvy and can gain a large advantage in society or conducting business through their network. Note that Chinese govt. (especially the lower rungs) tend to be corrupt/non-transparent and society is more about giving gifts (originally between friends and families, basically bribery if asking for a favour) so this tends to give a much more unfair advantage than Western society (the politically transparent ones). Chinese people (usually media) either think negatively of these kind of people as they see them having an unfair advantage while some respect and aspire to be guanxi-hu because of how well-connected they are.

sfifs 8y ago

Yes. That's how people like Elizabeth Holmes raise a billion dollars and gain a who's who board comprising of famous statesmen without any questions asked, how young son in laws become more powerful than career diplomats and how C- suites always get other C-suite jobs. At least this Chinese version in the electronics is more democratic and let's the little Chinese startup try out things quickly and get into a full commercial relationship if things succeed. I understand American companies used to do this early on but eventually rent extraction mindset took over. But this behavior extending up into actual corruption is very much a current problem for that country

forapurpose 8y ago
Did you think that someone was criticizing Chinese culture and it needed defending? And the defense is, there is some degree of corruption based on relationships in other places? Every place sometimes has bad weather too; does that mean the weather is the same everywhere? And does the fact that there is also bad weather in Rome have any bearing on the weather in Edmonton or help the people there? Addressing guanxi seriously: My understanding is that guanxi works against opportunity and the free market; not anyone can get a loan at the bank, for example; instead it requires personal relationships. Economists I've read said the lack of arms-length commercial relationships hold back economic development and opportunity in China, but that was written maybe 20 years ago and possibly things have changed. I do know that Communist Party connections, and particularly connections to the 'royalty', the families of leaders, are highly valuable and are at least sometimes seen as necessary for success in business.

losteric 8y ago

It's not really "favors". The person selling individual chips profits because they don't have the overhead of a formal business. There are open markets for formal businesses, which also expect you to be a formal business ready to purchase large volumes. and, tbh, transparency doesn't matter at low volumes. If someone can afford to carry a prototype to production, the difference between the average and lowest potential guanxi price for a single chip is negligible.