Dragon Business: How the Traditional Concept of ‘Guanxi’ Works in Modern Day China

There has been undoubtedly a rapid economic growth in China over the last few decades and globalization has affected many business practices in China. Therefore this study addressed the interesting question of how the traditional concept of ‘guanxi’ works in modern day China. This was investigated through the lived experiences and perceptions of how Hong Kong executives establish business relationships in China. This research is important because ‘guanxi’ has often been associated with the success factor of business practices in China. Through a qualitative research methodology this research found that the practices of ‘guanxi’ take a changing and integrated approach. While some elements including favours and benefits have changed to become more indirect, less materialistic and depend on trust, other elements like socializing, hierarchy and the long term orientation in a business context have decreased in importance. Further the different experiences in the government sector, different company size, geographic locations in China, as well as the emergence of a new generation, have shown that the formation of networks cannot be generalized, but take different approaches depending on the situation. The significance of this is that ‘guanxi’ is less important for large organizations and the new generation of Western influenced managers in China. Finally while experiences of ‘guanxi’ change, they take a more international perspective while maintaining some traditional elements such as face. This suggests that Chinese business practices combine and accept apparent opposite values of international and traditional practices.