Studying guanxi
Hongzhi Gao has just been appointed Associate Director of the new Contemporary China Research Centre, a national platform for China-related research and knowledge sharing, to be formally launched in April 2009 and involving Victoria University of Wellington and the Universities of Otago and Canterbury.
Funded by the Asia:NZ Emerging Researcher Grant 2008, Hongzhi Gao has set up a postdoctoral research project to understand guanxi-derived cultural barriers and special “go-betweens” who guide insiders and outsiders to work harmoniously.
Simply put, guanxi is a “special personal relationship” or “particular tie”. In his research, Hongzhi argues that guanxi is difficult for Westerners to comprehend and deal with in practice, as it operates in complex, culturally bounded, inner-circle Chinese networks. As demonstrated by Hongzhi’s research, an interconnected group of go-between actors actively and skilfully facilitate the development of business relationships between Chinese and New Zealand organisations.
These go-betweens are called “guanxi gatekeepers”. They are not prescribed or appointed from an organisational management perspective but only emerge from business and social interactions. Hongzhi sees intercultural (interpersonal) guanxi as a bridge between Chinese market insiders and foreign outsiders. Hongzhi has also discovered that Chinese guanxi insiders encounter seven kinds of risk rooted in Confucius ideology when interacting with Western counterparts in a business environment.
In an offshoot of the guanxi project, Hongzhi has researched the contaminated milk crisis in China, with funding from the 2008 Out-of-Season University of Otago Research Grant and the 2008 Asia:NZ Emerging Researcher Grant. The melamine contamination crisis spread in the Chinese market and involved Sanlu, Fonterra, and many other well-known Chinese and foreign brands in the Chinese market.
According to Hongzhi, one lesson that can be learned from the Sanlu-Fonterra food safety crisis in China is that foreign entrants quite often overlook the role of “guanxi gatekeepers” in the Chinese market; therefore they often work “in the dark”, particularly in relation to hidden quality and safety problems; something which can turn into a disastrous crisis like what Sanlu, Fonterra and others have faced in China.
Two papers have been developed from Hongzhi’s guanxi gatekeeper study; they are currently under review for publishing in two renowned business journals, Industrial Marketing Management and International Business Research. A few more papers are currently under development in relation to the melamine milk contamination crisis in China.
Hongzhi is grateful for the support from the Asia New Zealand Foundation in funding his postdoctoral research on gatekeeping and the associated Sanlu-Fonterra research. "The funding approval process for my project was quick and efficient," said Hongzhi. "Flexibility has also been built in the funding process in supporting enlargement of the scope of the project and achieving in-depth understanding of the research phenomena from both academic and practical points of view," he added.