Guanxi Embeddedness and Trust Building in Chinese Business Markets: A Confucianism Perspective

The study explores the concept of Guanxi by understanding its cultural roots and connotations and its impact on trust building. The Confucian philosophy of ‘lun’ and the way in which the five cardinal relationships of ‘wu-lun’ have had a significant influence on how Guanxi operates. The study also takes a deeper look at the way in which Guanxi influences the way in which trust works in Chinese business markets. The main argument is to investigate how Guanxi operates at many different levels in Chinese business environment in relation to trust building. The increase in globalization has posed some challenges on how Chinese businesses interact with global players in terms of trust. The various types of trust such as goodwill trust, competence trust and collective trust that are involved in the business transactions indicate how Guanxi has a strong influence. By exploring the role of Guanxi, the study develops propositions that Confucianism and Chinese cultural lead to a strong perception of Guanxi, Guanxi relates positively to trust building in Chinese business markets and trust relates positively to the success in business activities in Chinese business environment.