Guanxi bases, Xinyong and Chinese business networks

This paper, based on fieldwork conducted in Singapore and Malaysia, examines the social foundations and organizational principles of Chinese business firms, focusing in particular, on the inclination to incorporate personal relationships in decision making. It identifies three key aspects of personalism: personal control, personal guanxi relationships, and interpersonal trust or xinyong. Personal control is effected largely through depending on people whom one personally trusts as this would reduce risks and afford better business control. The paper also examines the dynamics between guanxi and xinyong, and how these ideals are played out in reality. A central argument is that economic decisions are not based solely on market considerations. Rather, they are embedded in the context of larger social relations and institutional forces which shape, reinforce, as well as challenge, a set of behaviours or organizational structures.