Trustmistrust

Trust/ mistrust

In China, chronic suspicion prevails (Smith 1894). Chinese 'appear to be quite suspicious and cold towards strangers with whom relationships have not been established' (1988 Yau). Nobody could be trusted except one's kinfolk in the form of the extended family (Hofstede 1993). As Chinese do not trust outsiders, a social network consisting of family members , relatives, friends , classmates, colleagues etc is the immediate sphere on which trust can be established, reciprocated and developed. Such an obsession with trust is caused by another, often neglected, phenomenon in China, dishonesty. In business transactions, a great deal of adulteration of goods is practised, for example, weights and measures are juggled (Latourette 1972). To protect one's interest and ensure that opportunistic behaviours such as cheating are kept to a minimum, trust must be established before any serious business relationship can be cemented. Trust-based guanxiwang is the alternative to the market which is often riven by opportunistic behaviours.

Not coincidentally, for both transaction cost theory and network theory, trust has been also regarded as a critical component of the network (Thorelli 1986; Jarillo 1988; Williamson 1988). Williamson advocates that exchange relationships based on personal trust will survive greater stress and display greater adaptability. Thorelli observes that trust in Oriental cultures may even take the place of contractual arrangements.