Exploring guanxi and cultural barriers: a perspective from the Taiwanese SMS investors in China

Earlier endeavours engaging intercultural comparisons have incorporated 'guanxi' (simplified Chinese), a term denoting the basic dynamic in personalised networks of influence, into their analyses on Chinese economic and political behaviours. The notion of guanxi, along with manzi (face), has been well documented in intercultural comparisons between China and the West. A myriad of studies have theorised the concept to examine the aspects of interpersonal relationships in the Chinese context. However, despite the obvious divide between China, Hong Kong and Taiwan, the cultural heterogeneity within the Chinese region has been seldom explored, in part due to a commonsensical unity of Chinese culture. Drawing upon several failure cases, this research examines some nuanced cultural differences and their ramifications within a large Chinese region. We pay attention to how the notion of guanxi has been restructured since 1949, the year Taiwan and China were separated. Over decades, while mainland China went through the upheaval of the Chinese Cultural Revolution (CR) and became increasingly liberalised in the late 1980s, the ruling authorities of Taiwan followed Confucianism to claim its legitimacy over Chinese culture and democratised rapidly. Through ethnographic interviews with the Taiwanese Small- and Middle-sized Business (SMS) who failed and withdrew, this study examines how some widely ignored cultural barriers may prevent the Taiwanese investors from thriving.