Globalization with Guanxi for Taiwanese high-tech industry to China: Panacea or Pandora´s box?

The importance of developing Guanxi in order to conduct business in China (and elsewhere in Asia) has been well documented. While the western concepts of networking and building strategic alliances often depend heavily on specific legal contracts, Guanxi in China depends more on face and reciprocity. This research query whether a system of Guanxi networks have application on the considerabe globalization in today´s China. Interview data collected from multinational corporate business (MNCs) in Taiwan is used to assess the relevance of guanxi for effective international operations with China from the perspective of Taiwanese expatriate managers. Provided by empirical evidence, the author claim that Guanxi utilization is heterogeneous across firms and tests the effect of Guanxi on performance, complementing findings of Yeung and Tung that Guanxi leads to higher firm performance, with a stronger impact on market expansion and sales growth than on financial returns.