DOING BUSINESS IN CHINA

Abstract

This study has several objectives. One is to focus on why and how the Chinese businessmen from Singapore invest in China. What is the motive: profit or ethnic affinity? In addition, this study explores the relationships between guanxi and ethnicity, and trust and ethnicity because many writers have stressed the importance of guanxi and trust when doing business in China, and have pointed to the shared ethnicity advantage for overseas Chinese businessmen. This study also attempts to look at the Singapore businessman's presentation of identities by proposing a stage-specific model of business negotiation. This study has shown the importance of the double identity for the Singapore businessman who seems able to alternate between his ethnic and national identities according to situational requirements. While his ethnic identity is functionally useful for building guanxi and trust, it can be dysfunctional, causing deterioration of guanxi and loss of trust. This gives rise to the need to invoke his national identity which can act as a shield against possible exploitations. His national identity is a cultural asset as it has impressive credentials -- a set of favourable stereotypes about Singaporeans such as honesty, diligence and reliability as well as China's acknowledgement of Singapore as a model of success. This study questions the conventional emphasis on guanxi and ethnicity and attempts to show that the Singapore national identity may well be a more valuable social capital than his Chinese ethnic identity during business transactions.