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- W2462072051 abstract "Contracts in China do not appear to have the same binding effect as it does in the Western world. For example in China, when the economic situation underlying a contract changes, the Chinese party expects the terms of the contracts to be renegotiated. Furthermore, because of weak courts, enforcement of contractual terms is uncertain (Yao and Yueh, 2009). So, what is the use of having a contract in the first place? Is there no rule of law in China? This article sets out the proposition that there is rule of law in China. However, contracts and the laws in China must be interpreted from the Chinese perspective. That perspective is that relationship (otherwise known as “guanxi”) is paramount to the terms and conditions of contracts. Contracts merely formalize a relationship that presumptively is based on mutual respect and trust. So if the situation changes, contract terms should be modified out of mutual respect and trust for each other (Ambler, Witzel, and Xi, 2008). Furthermore, this article argues that guanxi is being institutionalized by way of concepts written into the laws of China and the manner in which the courts of China interpret those laws, so that guanxi must be understood in order to successfully do business in China. Nonetheless, it is recognized that as China becomes a global player in the world markets, she will be forced to adhere to generally accepted international standards for commercial dealings. This may cause an erosion of the role of guanxi in the application of law, but we believe guanxi will remain at the core of business practices in China." @default.
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- W2462072051 date "2013-01-01" @default.
- W2462072051 modified "2023-09-23" @default.
- W2462072051 title "Doing Business in China: What is the Use of Having a Contract? The Rule of Law and Guanxi when Doing Business in China" @default.
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