THE ROLE OF GUANXI FOR TAIWANESS ENTERPRISES IN CHINA

摘要

In the early period, Taiwanese overseas investments were motivated by the southward advance policy of the Government and firms sequentially poured investments in countries in Southeast Asia and China. Taiwanese businessmen invest in China more and more frequently since they are the same race, have similar cultures and use the same language. Taiwanese businessmen invest in China and Southeast Asia not only because of low-cost labors and abundant natural resources, but also because of diversified risks by overseas investment. However, the politics is less transparent and the law system is not well developed in China, so when making a decision to invest in China, enterprises should take both market and non-market strategies into account. In this research, we adopted questionnaires survey for Taiwanese investors in China. We focused on executives of these enterprises and these investments were mainly in the coastal economic zone of China. There were totally 111 usable questionnaires and the majority of these enterprises were in the technology industry (32%) and the plastic industry (21%). The results showed that if the market and the politics are stable, guanxi is not commonly used. Moreover, there is no significant relationship between the market strategy and the operation performance when enterprises invest in China market. The operation performance of enterprises using both market and non-market strategies is better than those using single strategy. Therefore, we believe that guanxi plays a significant role on the condition of investing in China.