CONTENTSPrefaceIntroductionThe Case StudyChina and Chile open up to the rest of the worldChile： Economic reforms and opening-up to the outside worldThe diplomatic framework of the bilateral relationship： first contactsSetting up diplomatic relations between Chile and the People''s Republic of ChinaDiplomatic relations during Pinochet''s regimeBilateral relations at the end of the 20th centuryThe free trade agreement FTAFeatures of Sino-Chilean relationsThe rhetoric of firstsOther features of the commercial relationshipBox 1.1Culture and economic interactionRationalism versus CulturalismThe Influence of Confucianism,Taoism and Buddhism on Chinese business cultureConfucianismTaoismBuddhismBox 2.1Box 2.2Decoding the Chinese code： intercultural culture and communicationThe importance of culture for the Chinese and ChileansCultural representationsThe conceptualization and role of cultureCultural adaptationTell me who you know and I will tell you who you are ... guanxiGuanxi as a sociocultural mechanismThe importance of guanxi in businessThe Chilean experience of guanxiFeatures and aspects of guanxiSources which generate guanxiMechanisms for building guanxiBox 4.1Box 4.2Xinyong： Trust in businessFamiliarity： interaction and understanding as sources of trustShared identity as a source of trustContracts and trustBox 5.1ConclusionReferencesAppendix 1 List of interviewees
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PrefaceNot long ago Chile was an economic poster-boy for South America. The first of the continent''s countries to join the OECD, its liberal trade opening had wrought suitably profitable returns with a period of impressive growth. But the easy gains of early liberalisation are drying up： growth rates are becoming sluggish and the vulnerabilities of over-reliance on mineral exports and a limited number of key trading partners remain clearly visible.In 2006, the Chilean government had hoped that a Free Trade Agreement with resource-hungry China would provide Chilean entrepreneurs with access not only to a massive new market for a more diverse compendium of exports, but would encourage Chinese FDI to boost its own domestic growth. Sure enough, by 2012 China had become the largest destination for Chilean exports, but as this timely volume shows, the relationship has failed to develop either the depth or breadth which was anticipated, or to break Chile out of the constraints set out above. Mineral exports still dominate the export ledgers and have proved inconstant according to China''s own fluctuating demand and related global prices. Meanwhile Chinese FDI, despite growing overall, has been marginal compared to that flowing into other regional destinations such as Peru, Colombia and Brazil. Despite its successes, the business of doing business with China has proved more complex and less accessible than previously thought.Of course, Chile is not the only rather disappointed trade partner in this sense： China''s own opening up to the global trade regime has been viewed as a new frontier of opportunity by just about everybody, but China has both the size and the confidence to engage the world largely on its own terms. Capturing a market of 1.4 billion is no easy task and firms from around the world have found that even small slices of it often remain elusive. The barriers to trade and partnership constructed through a prolonged period of attempted Chinese economic self-reliance have barely diminished and often prove frustratingly hard to pin down. Capitalism does, it seem, have local variations which are rooted in something more profound than ''irrational'' interventions in the market such as corruption and bureaucracy. That doesn''t mean we need to resort to imposing the kind of crude and orientalist stereotypes peddled by Max Weber in The Protestant Ethic and the Spirit of Capitalism back in 1905, but it does mean we need to look again at a much wider range of factors impacting upon economic activity, including the possibilities presented by inter-cultural exchange.Nothing new there of course. Culture as a component of business relationships is a much examined topic. The Internet is awash with websites offering the would-be international entrepreneur top tips to doing business in China which amount to abbreviated cultural guidebooks. But how used have we become to the orientalist assertions which place the country and its people mysteriously out of reach; unknowable, unpredictable, unassailable. Can these be overcome by advocating the simple two-handed surrender of a Chinese-language business card, by the offering of gifts, and carefullyprogrammed entertainment schedules designed to seduce potential business partners with illusions of informality and personal connectedness, as suggested by such websites. Is Chinese business etiquette really so formulaic and ''fixed''? Surely we need a more sophisticated and nuanced approach to understanding how the local business cultures of both parties in an international exchange shape contexts and outcomes, and how they themselves are neither fixed nor immutable, but subject to amelioration and adaptation.As this important book illustrates, the inter-cultural contexts of these exchanges are inevitably as dissimilar as the cultures of the parties themselves. Academic frameworks which build their understandings on exclusively American or European interactions with China may not suffice for those seeking to understand the economic interactions between the Asian giant and a country such as Chile. The book draws upon extensive fieldwork and gives voice to the very participants who have comprised the evolving Chilean-Chinese economic relationship, offering a unique and original set of insights with an invaluable and transferrable methodology.But it does oh so much more. While foregrounding the inter-cultural context of economic exchanges is a valuable exercise in itself, Labarca shines a light on the complexities which arise from a two-way traffic of exchange as well as the multiplicity of participants when an evolving economic relationship is being actively nurtured by governments on both sides. Can governments foster the all-important trust which underpins relationships between business partners, or do their interventions have only a marginal impact compared to an appreciation of, and adaptation to, the partner''s values and practices? An appreciation of trust has filtered through to the mainstream of academic study when it comes to business partnerships, and to our understanding of inter-state relations, but little has yet been done to evaluate trust as an outcome of intergovernmental trade agreements in so far as it softens the edges of entrepreneurial concerns on either side of the exchange. Indeed, what constitutes, as well as how to build, trust are culturally-determined notions, adding to the layering of the study at hand.In the end, the results of this study contribute to the case against the argument that cultural homogenisation is an inevitable accompaniment to globalisation. There may certainly be a necessary process of adaptation, an instrumentalist accommodation, even a learning of cultural modes and practices which is re-imported to alter domestic business cultures. But the evidence here suggests that Chinese business communities have retained their cultural integrity even as the barriers to global economic integration have been lowered. The strength and potential of the Chinese economy suggest it remains up to the rest of the world to learn how to live with that.Prof Emma MurphyDurham University
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