The importance of Guanxi to multinational companies in China

Abstract

Guanxi is an important part of Chinese business culture, and there are a large number of business people from all over the world coming to China since its opening up and reform policies. The purpose of this paper is to examine the importance of Guanxi to multinational companies in China, and discuss if its importance has declined since China's opening up and reform policies have reached an advanced stage or not. In China, Guanxi can not only assist transnational companies to obtain sources of information and resources, including business opportunities, government policies, and scarce necessities and professionals, but also be of great value to them in terms of building up corporate reputation, enlarging market share and even motivating employees, although associated with bribery and corruption. Thus, Guanxi is definitely important for international enterprises in China, and it remains significant despite of advanced opening-up and reform policies.