Why we write about this topic:
That geopolitics is a subject as sensitive as it is dynamic is something we see in the news daily. An alliance that seemed ideal yesterday may already be completely undesirable tomorrow. How do we keep things in balance as a continent, country, or even region? How do companies deal with this? To find out, Dr. Yuxi Nie puts the magnifying glass on the relationship between Brainport Eindhoven – a high-tech region that is extremely sensitive to the consequences of geopolitics – and China. In a series of articles, she keeps us informed of the progress of her research, which aims to devise effective communication strategies for Brainport. Today part 7.
By Yuxi Nie and Bailina Ainiwaer
When dealing with cultural differences between the Chinese and Dutch working environments, it takes both sides to keep an open mind to build a trusting relationship. However, building trust with one’s professional partner varies in different cultural contexts. As the previous blog mentions, Chinese professional relations are more likely to mingle with personal relations through “guanxi” (关系, connections/ networks), whereas Dutch business relations tend to build on a contractual agreement. Even though informal relational and contractual postures do not necessarily contradict each other, in Chinese culture, generating a personal connection is an essential first step in building a long-term working relationship.
What does “guanxi” mean?
The Chinese term “guanxi” (关系) can be referred to as connections or social networks. The term consists of two characters, 关(guan) and 系 (xi). 关(guan) means “to involve” and 系 (xi) means “to connect” or “to relate”. The notion of guanxi traces back to the understanding of kinship in Confucianism. According to Confucianism, guanxi, as inter-familial relations, forms the critical foundation in a social system built through mutual commitments, reciprocity, and trust. That means those unwilling to abide by the rules of reciprocity would be perceived as untrustworthy.
Carrying such cultural values, in the Chinese business context, guanxi is regarded as the credit that one has with others through providing assistance or favors or deriving from personal recommendations. In other words, it allows individuals to leverage their networks to access resources, contacts, and other opportunities.
As the previous blog explains, “guanxi” also connotates a “favor-seeking pragmatistic social practice” through which one achieves professional goals by wielding influences through personal connections. In that sense, such practices also lead to hierarchy and conflict. Due to its negative connotation, Chinese professionals today also associate “guanxi” with “renmai” (人脉), which has a closer reference to a professional network.
What does this mean for business communication between Dutch and Chinese professionals? Has the notion of guanxi changed or adjusted among the modern-day’s Chinese professionals working in various leading industries in the Netherlands? Through an ethnographic approach, this blog further explores the cultural implications of guanxi through the perspectives of young Chinese professionals working in the Netherlands.
“As social resources, guanxi is established through long term accumulation and maintenance among individuals. In Chinese professional context, the halt of a contractual agreement does not mean the end of guanxi between the two parties.”A Chinese business leader, 2023
Combined with fieldwork and participatory observation, we have conducted a series of semi-structured qualitative interviews with Chinese business professionals from various industries. Bearing in mind that the data set is limited, we aim to achieve representativeness and objectivity in the selected target group.
The profile specifically includes Chinese professionals born in the late 1980s and early 90s who have worked or obtained acute awareness in both Chinese and Dutch working environments. The perspectives shown by this group do not necessarily represent complex societal groups in China. Our selected target group of Chinese overseas professionals share strikingly similar educational paths and social economic backgrounds. Equipped with professional skillsets and cultural sensitivity, this group of Chinese professionals plays significant roles in bridging intercultural communications between Chinese and Dutch organizations.
Our research indicates the following key findings
- All respondents emphasize the importance of understanding how guanxi works when doing business in China. While most of these Chinese professionals admit that they have benefited from their personal connections during their earlier professional development in China, they hold many critical views on the extensive use of guanxi and its implications in terms of professional unfairness, social inequality, and cultural exclusion. As one respondent mentions, “guanxi means if someone does you a favor, you need to pay it back in a different form other than money. It is not a free lunch, but you would not know how to pay it back until maybe you do at some point.” Our interviews also show that compared to their earlier professional development in China, most respondents express that they intentionally avoid mingling professional and personal relations while working in the Netherlands.
- All our respondents notice the similarities between the concept of guanxi in Chinese society and social networks in Dutch society. They observe that applications of one’s personal connections, social networks, referral systems, and even family ties are not unique to the Chinese working environment but also play a part in Dutch and other cultural contexts. They observe that it is not uncommon for Dutch professionals to use personal networks or even family ties to achieve professional goals.
- Lastly, most of our respondents argue that there are marked differences between the concept of guanxi in China and the network in the Netherlands. The main difference lies in the order of things. Guanxi in China insinuates a deeper layer of social relations than networking in the Netherlands, as it goes beyond professionalism to a grey zone of exclusiveness. Our interviews show that compared to the Chinese context, networking plays a less dominant role in the Dutch professional field. An interviewee says, “In certain areas of China, who you know can sometimes become the first and foremost way to solve problems in many practical matters. In contrast, networking may help solve problems in the Netherlands, but it is not THE solution. Qualification is always the priority when applying for a position or bidding on an offer in the Netherlands. An employer is likely to hire someone with best skills and good personal relations, and is less likely to hire someone they like the most but with mediocre skills.”
Where are the boundaries?
Our research presents contrasting views in terms of conceptualizing the notion of guanxi among Chinese professionals working in the Netherlands. On the one hand, most regard guanxi as a tool cultivated among different social groups in China. They consider the professional network as part of guanxi. Guanxi includes both professional network activities and personal relations. An interviewee explains, “Guanxi is positive for those using it to their advantage and negative for those lacking social connections. It depends on who is using it and how it is being used.”
On the other hand, a few interviewees argue that the application of guanxi and professional network, in fact, oppose each other. The reason lies in the exact boundaries between personal and professional space. As an interviewee contends, “by committing to maintaining guanxi with others, one compensates their privacy, both their private time and private activities.” In this sense, one sets up boundaries by cultivating one’s guanxi. How these boundaries are set would, in turn, influence the degree of privacy one compensates in achieving professional goals.
Where the boundaries are eventually depends on the consequences it leads to when wielding one’s power through either network in the Dutch context or guanxi in the Chinese context. As an interviewee says, “By establishing a social circle, you surely include someone and exclude someone else.”
“Guanxi represents a kind of informal tie. Individuals from completely different social economic backgrounds in China can cultivate this type of informal tie, to build up trust and respect. Guanxi is a kind of capital that can be exchanged in various social economic activities among individuals from different backgrounds.”Yujing Tan, Lecturer at Leiden University, 2022
Our interviews conclude that compared to Dutch society, where the idea of networking is purpose-driven, Chinese society is more of a relationship-oriented society (renqing shehui, 人情社会) where relational boundaries are constantly shaped, crossed, and cultivated by individuals.
Social capital is defined as “the sum of the actual and potential resources” embedded in and derived from the network of relationships. Through networks and social values, such resources could facilitate “coordination and cooperation for mutual benefit”. Showing similar features in such definition, guanxi is regarded as a form of social capital that allows personal and informal networks to influence or even decide professional relations. According to sociologist Pierre Bourdieu (1986), with its fluidity and convertibility, social capital enables individuals who occupy different positions to carry varied resources and exercise different levels of power control.
Judging the use of such social capital through a moral perspective leads to the question of who can set the boundaries and how rules work in a society. According to Bourdieu, attaining social capital inevitably causes conflict and power struggles. Further research would open up a discussion of where communication power lies in different social contexts. One of our respondents points out, “The power of guanxi, in fact, lies in not using it but keeping it, through which one continues to strengthen their networking power.”
Dr. Yuxi Nie is a researcher-lecturer at Fontys University of Applied Sciences, executing the research project “Towards a communicative strategy that guides Brainport companies to do business with China in a growing digital business context”. Business relations between Brainport organizations and their partners based in China have been growing rapidly. Probing the geo-political, intercultural, and digital challenges, this project explores the Sino-Dutch corporate communicative strategies and aims to develop effective communication strategies for organizations in Brainport. This two-year Hbo-postdoc project started in 2022 and is funded by Regieorgaan SIA (link: https://regieorgaan-sia.nl/financiering/hbo-postdoc/), part of NWO, the Dutch Research Council.
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