The Institutional Process of Market Clientelism: Guanxi and Private Business in a South China City

Patron—client ties are pervasive in the post-Mao economy between entrepreneurs operating private firms and cadres staffing the state's administrative, distributive and production organs. The burgeoning literature on private business is converging on a view of them as localized exchanges of commercial wealth for bureaucratic power. These deviations from central policies and standard procedures enable entrepreneurs to manage their dependence on local authorities while giving officials new sources of income that buttress their power within jurisdictions. However, less attention has been paid to the ties themselves. This article shifts the focus from patron–client ties as localized exchange to examine their operation in private business and function in marketization. The starting assumption is that patron–client exchange is also a type of market transaction: although expressed in popularly legitimated sentiments of social trust, goods and services are voluntarily exchanged.