When I was growing up China was one of the world’s poorest countries; today its economy is the largest in the world when measured by purchasing power parity. How did this transformation occur? This is a big question. Part of the answer is in the switch from a planned to a market economy – and within that, the creation since the late 1970s of private business. Since then the strata of private entrepreneurs has undergone many changes, summarized in the Introduction to my book Entrepreneurs in Contemporary China: Wealth, Connections, and Crisis.
A feature of China’s economy today is the significance of e-commerce, a dynamic world-leading sector with which most Chinese people have daily contact. While e-commerce is the fastest growing marketing form world-wide it is under-explored by academic researchers. This seemed like a good reason to have the first chapter of the book explore e-commerce. To discover the ways in which entrepreneurs engage with e-commerce, and to examine other aspects of business, I conducted 65 interviews with founders and CEO’s operating small and medium businesses in a handful of Chinese cities as well as extensive participant observation.
One aspect of the popular image of business life in China is the prevalence with which entrepreneurs entertain officials, business partners, and clients in drinking clubs and karaoke bars where alcohol is extensively consumed and prostitutes engaged. The construction and maintenance of the relationships of mutual support that such behaviour underpins, known in Chinese as guanxi, are not the end of entrepreneurial activity but one of its means. There is much more to guanxi than nefarious activity. Typically ignored aspects of guanxi are revealed in Entrepreneurs in Contemporary China.
A feature of guanxi universally acknowledged is the way in which its participants are obligated to serve the needs of other members of their guanxi network. I show that such networks not only constrain the behaviour of their members but also that guanxi participants possess extensive agency in shaping their network, influencing the norms that govern it, and managing the expectations and conduct of other members. It is also shown how businesses manage their workforces through the development of intra-firm guanxi. Additionally, I show how trust relations between entrepreneurs are finessed through guanxi.
The book provides a new account of trust relations between businesses which turns on its head the conventional approach, which assumes that broken trust disrupts relations between trust-giver and trust breacher. I show instead that the basis of trust may be redefined and reaffirmed, subject to personal strategies of engagement focussed not only on the behaviour of the other but also the trustor’s changing expectations. In this way, the theory of trust itself is radically revised. In fact, the book is concerned not only with the empirical landscape of market and business cultures in contemporary China but also provides a discussion of theories about these and related topics.
In addition, this book has important new things to say about family business and gender. It is widely assumed in the research literature that female partners are characteristically subordinate in family businesses. This isn’t what I found in contemporary China. Chinese women in business typically experience their intergenerational family more as a resource that facilitates their business endeavours. The last chapter considers the nature of crisis and its role in entrepreneurial development, how crisis provides opportunities for renewal and not necessarily business closure. This is a good theme on which to end as the Covid pandemic has shown how crisis is not only multi-faceted but also generative of new possibilities and opportunities.