CHINA: Guan Xi – It’s All About Whom You Know, Reports The New York Times

If you’ve ever done business in China, you would be very familiar with the term “guan-xi,” translated as connections. Without any guan-xi, it is nearly impossible to get things done. China is a nation built on guan-xi, a business deal-making strategy embedded in the culture. From a Western democratic perspective, this type of deal making looks shady and corrupt. But for the Chinese, it is a practice expected from everyone. So why are we so surprised to find out about Wen Jiabao’s business connections and high fortunes?

Wen Jiabao, China’s current prime minister, known as “Uncle Wen,” has quite the good-guy reputation for standing against corruption. Brought up in a humble home, Wen often uses his origins to appeal to the masses of China. The image that he has painted over the past decade portrays himself as a hero who stands in solidarity with the common folks.

This reputation, however, came under attack recently by the famous New York Times. This trusted newspaper dug deep into Wen’s guan-xi and published a report on all the businesses, fortunes, and other connections Wen’s family members are involved with. In a nutshell, New York Times accused his mother of holding $120 million dollars, his wife of using the rise of family status to benefit her multimillion diamond company, and other family members of making business deals with giant corporations as Wen gained more political influence.

In response, the Great Firewall of China quickly dispatched hundreds of its employees to block off the report and everything surrounding it. The report, although blocked, is inevitably making its way to the Microblogs therefore catching Netizen’s attention.

Wen, keen on protecting his good-guy reputation, is no fool. He is aware of the power of the internet, but more so, he sees the cultural changes in China due to the internet. The communist party can no longer withhold information that easily. So instead of fighting the new system, Wen decides to work with it.

Right after New York Times published the report, two of Wen’s lawyers released a public statement countering the accusations:

•                The so-called “hidden riches” of Wen Jiabao’s family members in The New York Times’ report does not exist.

•                Some of Wen Jiabao’s family members have not engaged in business activities. Some were engaged in business activities, but they did not carry out any illegal business activity. They do not hold shares of any companies.

•                The mother of Wen Jiabao, except for receiving a proper salary/pension, has never had any income or property.

•                Wen Jiabao has never played any role in the business activities of his family members, still less has he allowed his family members’ business activities to have any influence on his formulation and execution of policies.

•                Other relatives of Wen Jiabao and the “friends” and “colleagues” of those relative are responsible for all their own business activities.

•                We will continue to make clarifications regarding untrue reports by The New York Times, and reserve the right to hold it legally responsible.

Public statements from top leaders of China’s Communist Party like this are, well, unheard of.  So this is astonishing! One can credit this to Wen’s integrity, but there is also a clear sign of fear of further accusations regarding corruption. After powerful provincial governor Bo Xilai’s fall from grace, much thanks to the spreading of information via Microblogs, it is no surprise that party officials are not at ease anymore.

So indeed, Wen’s massive fortunes and business connections are not shocking at the slightest. The importance of guan-xi is understood across the country, at part of a long and sleazy tradition. In this age of internet communication, however, the concept of guan-xi may be building a weapon of self-destruction. Soon, guan-xi will need a much better P.R. strategy to fool the public into accepting it. Otherwise, it will continue to be seen as the country’s root cause of corruption. And that will surely lead China’s top leadership to its downfall.

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