An Economic Analysis On Guanxi Behavior In China’s Economic Society

Guanxi is an highly important and commonplace social and economic phenomenon.Up to now, scholars at home and abroad usually investigate and analyze Guanxi·sbehaviour and its presence in China·s social and economic activities from the perspectiveof sociology. This paper will try to shed the existing thinking and place Guanxi intoChina·s economic development and institutional change, digging out how it impactsChina·s economic development.First, starting from the hypothesis of strong and weak tie, it will scrutinizerelevant conceptions and theories of sociology and economics and evaluate existingtheories. Second, by virtue of economic ideas and methodology, this paper will classifyGuanxi into two states, Static and Dynamic. Then it will reach Guanxi·s diversity andcomplexity through investigating supply and demand factors under the static state andanalyzing Guanxi·s long-run unfolding. Moreover, theoretical analysis on positive andnegative effects of Guanxi, incorporating features of assorted China·s social stages, thispaper will introduce Guanxi into economic development in each period. The comparativeanalysis of strong tie·s investment and benefits and the understanding of the changes ofinstitutional environment in which strong tie plays its role will indicate how strong tietakes effect as a substitution of formal institution in times of the planned economy periodand the early stages of the transition, and its negative effects in the stretchof the later stages of the transition and market economic system. In the end, by an analysison questionnaire and case study, it will verify relevant conclusions in this paper. And aserial of analysis of strong tie will safeguard the conclusion that acting on the basis ofstrong tie will strangle China·s further economic growth and this paper will accordinglyput forward relevant policy suggestions.