The capitalisation of guanxi and Chinese entrepreneurship: an ethnographic study of petty entrepreneurs in Guangzhou, China

Abstract

Existing studies of guanxi and entrepreneurship often conceive of guanxi in a general sense and explore its effects, significances, usefulness or values from cultural, structural and economic perspectives. As a contrast, this study aims to substantiate guanxi in the actual entrepreneurial process based on detailed ethnographic data derived from extensive fieldwork among petty entrepreneurs in the garment industry of Guangzhou, China. This study adopts a ‘culture in action’ and social resource capitalisation approach to examine how certain types of guanxi are mobilised for key aspects of a business start-up, such as business information, start-up capital and getting purchase orders. The empirical data reveals that, in general, the palpable capitalisation processes of guanxi are regulated by guanxi norms and obligations. A cultural awareness of guanxi leads to the differentiation of guanxi and business guanxi. Guanxi used in business may be regarded as a byproduct of the workings of guanxi in a complex social world.