ABSTRACT
This chapter examines the much overlooked aspect of guanxi, namely, the economic incentives that have sustained guanxi transactions for centuries. The Chinese have long understood the exchange value of guanxi. Knowing the right people at the right time helps to open access to needed survival resources: use of tools, bank loans, promotion opportunities and so on. This unofficial pathways or personal connections are called guanxi – a relational network consisting of extended family and friends. Widespread and effective, this guanxi network had served as an underground redistributive mechanism that has helped to ease stark inequities. But as society became more complex, the exchange value of guanxi as a social capital proliferated and guanxi network began to grow with “rhizomatic” rigor. It is obvious that in a relational culture, guanxi with its positive and negative values will never completely go away. The hope to minimize the potential of guanxi cronyism lies in the establishment of a disinterested legal system. Ultimately, however, the exchange value of guanxi will decrease only when the desirable resources – not just material or financial but also opportunities and access – become fairly or legally obtainable.
