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Guanxi and corruption in China - Essay Example

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In China, individuals rely on Guanxi, networks, to obtain jobs and to get other things done. Cultivating a network is central to Chinese society and politics. Guanxi works on the principle…
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Guanxi and corruption in China
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of Affiliation Guanxi and corruption in China Guanxi is a Chinese word that describes personalized networks of influence and exchange. In China, individuals rely on Guanxi, networks, to obtain jobs and to get other things done. Cultivating a network is central to Chinese society and politics. Guanxi works on the principle of reciprocity. Loosely translated, reciprocity means you scratch my back and Ill scratch yours. Many have argued that the culture of Guanxi explains why China is beset with severe problems of corruption. Chinas current president, Xi Jinping has made fighting corruption a top priority of the Chinese state and communist party. In this short essay, I will start out by outlining problems of corruption in contemporary China. Then, I will explore to what extent Guanxi may contribute to what many perceive as a crisis of rampant corruption in the country.
China has in the recent past been an object of scathing criticisms from both the local and international players over its apparent tolerance to corruption. Gong (2011) portrays the perception of China by Westerners who associate business culture in China with Guanxi. Regardless of the favour or job one wants in China, all that matters most is the ability to give gifts or bribery. Guanxi illustrates the complex form of corruption where relationship with bigwigs and those in powers motivate most of the decisions. In addition to enhancing business prospects for the corrupt in China, Guanxi has further led to the formations of monopolies pegged on capitalistic endeavours. This practise in fact threatened the survival of China as communist country. To further illustrate the problem of corruption in China, a survey one conducted on 100 people who were prosecuted for bribe-giving. The result indicated that 94.2% of them asserted that “they would “warm up the relationship” first before they would bribe with money” (Ling Li 7). Corruption through Guanxi has harmed Chinese image on both the local and international spheres. Illegal businesses that fail to adhere to human rights have been allowed to operate without legal charges. Also, the level of property rights violations and manufacture of counterfeit products without concomitant legal actions has left many questioning the willingness of China to fight corruption (Zhang).
The Chinese judicial system is one of the areas significantly affected by cases corruption. “Guanxi” is evidently a factor into a judicial or arbitral decision. However, worth noting is the fact that this corruption does not necessarily assume the traditional form of bribe, payment, or “gift” exchanged. Instead, decisions are reached or considerably influenced by personal networks rather than the facts or law (Lewis 6). The success of lawyers in China may not directly relate to their acumen but to the fostered relationship with various public officials, judges and administrative personnel across China (Lewis 6). Linda Yueh (2013) writing for the BBC News observes that people in China are generally reluctant to go to court due to lack of independence in the judiciary. She further notes that building such a relationship does not only involve time, but also gifts and banqueting. Both local and multinational companies are capitalizing on Guanxi to establish, consolidate, and protect their business empires. For example, in the scrutiny of entertainment and travel costs (ETC) section of a firm’s balance sheet, World Bank economist Colin XU and his colleagues discovered that ETC in Chinese firm reflect “grease money” “to obtain better governmental services as well as what they term as "normal business expenditure" to build relationships with suppliers and distributors” (Yueh).
In summary, I have learned two key things about corruption and Guanxi in contemporary China. First, the war against corruption is in China is difficult due to the complexity of relationships created through Guanxi. The judicial system is by itself very corrupt leaving many people disillusioned with the Chinese justice system. Secondly, corruption is deeply seated in the Chinese economy and does not only take the traditional forms of bribery. There are cartels which have established a relationship linkage aimed at protecting the interests of individuals or members of the cartel. Therefore, the war on corruption must be fought by first identifying the established Guanxi and, secondly, undertaking judicial reforms that would ensure real justice.
Works Cited
Ling Li. Performing Bribery in China: guanxi practice, corruption with a human face. Journal of Contemporary China (2011), 20(68), January, 1–20
Gong, Emily. To corrupt or not to corrupt? The paradox of guanxi. 2011. Retrieved from: http://www.nyuzaishanghai.org/jobs-internships/to-corrupt-or-not-to-corrupt-the-paradox-guanxi/
Lewis, Randall. Clarity on Guanxi, Cultural and Media Issues in China. ASIAN BRIEFINGS March 2013
Yueh, Linda (2013). Chinas corruption drive. BBC News. 1 August 2013 last updated at 17:14 ET
Zhang, Lijia. In China, everyone is guilty of corruption By, Special for CNN updated 11:01 PM EDT, Wed October 23, 2013 Read More
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