Abstract
The concepts of ‘guanxi’ (relationships and networking) and ‘xinyong’ (interpersonal trust) in Chinese traditional ethics are often studied as the key factors that contribute to the pattern and succession of the ethnic Chinese in business practices which are based on the cultural approach. In the context of Southeast Asia such as in Indonesia, Malaysia, The Philippines, the ethnic Chinese are one of the minority groups whose profession is dominantly that of a businessman or an entrepreneur. As stated in the literature, even though the ethnic Chinese are classified as a minority group in those countries, some of the Chinese capitalist groups had controlled 70-80% of the private business sector. However, these two traditional concepts are not the only main factors of the Chinese business success, but the ‘irregular’ business pattern such as the patronage relationship with political elites also becomes the most important criteria. Hence, this study needed to re-examine and clarify whether the implementation of the guanxi and xinyong concepts in Chinese business activities are still relevant in their business practice due to the political connection in the Chinese business succession also being a dominant variable. This study was based on a fieldwork conducted in Indonesia especially in Medan City of Indonesia and used the descriptive qualitative method through interviews and library research. This aim of this study were three fold: the first was to discuss the relevance of the guanxi and xinyong concept in Chinese business practices, the second was to discuss whether the Chinese business practices were more influenced by a formal community organization or rather influenced by an informal network among Chinese businessmen through guanxi and xinyong bases, third, this study also discussed the challenges faced by the Chinese in attempting their business interests.
Highlights
An increasing amount of literature on migrant ethnic Chinese studies, in particular in business practices, has shown their importance as a minority group that plays a significantMohammad Fajar Ikhsan, Ahmad Bashawir Abdul Ghani & Muhammad Subhan role in terms of the economic sector in several countries (Dorsch & Dorsch, 2012; Koning, 2007))
Based on the condition of the Chinese doing business in Indonesia as aforementioned, the objective of this study was to discuss whether the traditional concept of guanxi and xinyong are still relevant in their business activities especially of the Chinese small and mediumsize businesses, even though at the state level of business capitalization and capitalism, the Chinese businesses were more influenced by political connection especially during Suharto’s era
The paper concludes that the guanxi and xinyong concepts have their own portion to the Chinese in Medan
Summary
An increasing amount of literature on migrant ethnic Chinese studies, in particular in business practices, has shown their importance as a minority group that plays a significant. According to Raffles (1817, in Tan, 1979), the Chinese were “the life and soul of the commerce of the country” It showed how important and vital the position of the Chinese was for the Dutch in terms of the economic sector. When the Suharto regime came to power, known as Orde Baru (New Order), in 1966, the position of the Chinese remained an interesting issue in Indonesian socio-political discourses During this time, some discriminative policies were issued by the regime which resisted the Chinese interests in terms of social and political rights. PTrhaectRicealellvya,ntchyeo‘fc‘uGkuoanngx’i ‘baenhda‘vXioinrycoanng’bCeoenxcepplat iinneCdhbinyesteheEtphantircoBn-ucsliineensts pCoalpititiaclsizmatoiodneli.nSInudhoanretosia had given continuously political accommodation, access and facilities to some Chinese businessmen It seemed that the formation of the informal relationship between Suharto and the Chinese businessmen was for mutual interests. Based on the condition of the Chinese doing business in Indonesia as aforementioned, the objective of this study was to discuss whether the traditional concept of guanxi and xinyong are still relevant in their business activities especially of the Chinese small and mediumsize businesses, even though at the state level of business capitalization and capitalism, the Chinese businesses were more influenced by political connection especially during Suharto’s era
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