The China Venture

• China’s entry into membership of the Paris Convention for the Protection of Intellectual
Property
The patent law was introduced in 1985. To satisfy foreign investor concerns over the
protection of computer software, specific regulations were promulgated by the Government to
protect computer software and to establish a system of registration. As a result of these
important developments, China’s system for the protection of intellectual property is
complete. 91
3.2.4.6 Guanxi
China’s traditional politic al system was fundamentally a pattern of personal relationships.
Today, personal relationships known as guanxi form an invisible network which often
provides the most efficient way of getting anything done. Therefore, the extent of one’s own
personal guanxi may determine the legality of what one does. Given the strong increase of
Chinese legislation, it is easy to assume that the written law in itself is the law. Unaware of
the informal systems functioning beyond the statute, a foreigner may find himself working
with only part of the system. The obligation to help and support is the crucial factor in
Chinese networks. There are three different degrees of obligation:
• the strongest form of guanxi is caused through birth. For family members it is a natural
duty to support and trust each other. The family is the central basis of Chinese society and
the business environment, which is supported by their "Confucian“ values.
• the second form of obligation stems from life experience. These are personal ties formed
prior to a business career. School-, University-, Army-friendships, which build life -long
solidarity towards each other.
• the third and weakest form of obligation is based on personal connections from business.
Since the reform area has started, business associations, such as the "Individual Laborers
Associations“ or "The Young Factory Director and Manager Associations“, etc. have been
established in Shanghai in order to build a business network.
Most successful businessmen realise the importance of guanxi, and all of them have their
relationships, but only in their "Western world“ and business environment. The above
mentioned first form is inaccessible to foreigners, and the second is very hard to achieve.
91 The Business Guide to China, Lawrence Brahm, Li Daoran, 1996, p.19.
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