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Guanxi Advantages And Disadvantages

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Guanxi
What is Guanxi? Guanxi 关系 is a Chinese term that describes relationships that may result in the exchange of favours that are beneficial for both parties. Another example of Guanxi is the relationships individuals cultivate with other individuals within different environments; these environments can vary from personal, business or government. The literal translation of Guanxi is the gate through which one accesses a group; guan means “gate or pass” and xi means “group or organisation”.
There is a great significance of Guanxi in Chinese culture still to this day:
• 92.4% view Guanxi as having an imperative role in their lives
• 84.5% do not trust people until a firm relationship has been built
• 71.7% prefer using their Guanxi network …show more content…

There are numerous benefits regarding Guanxi in China. To summarise a few points, it is used by the disadvantaged/weak to shelter themselves, it constantly improves the efficiency in businesses and secures vital business opportunities to counter outsider competition such as international companies venturing into China.
Securing rare resources are one of the benefits of Guanxi, numerous materials are under the control of certain departments within the Chinese Communist Party. So, getting hold of these particularly scarce resources all comes down to knowing the right people within one’s large Guanxi web of relationships. Furthermore, they can also help you obtain basic resources required for companies to initially start up within China such as land, labour and licences.
Although there are benefits to Guanxi, it comes with downfalls. Now, one of the downfalls for example is regarding the fact that it is difficult for business people to determine who is making the verdicts in a Chinese firm. Numerous individuals also feel that Guanxi promotes forms of corruption and bribery – corruption is a lot higher in rent-seeking Guanxi as mentioned previously and amongst state owned

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