The Relevant Theories in the West

You may often see a Chinese show off and say: ―I have a big Ren Mai‖ or ―I build up my Ren Mai strategically‖, etc… What is Ren Mai?

Ren Mai can be defined as an ego-centered social network composed by trust relations. It can be directly translated into relational context, and there is a parallel concept in sociology, i.e. micro-level social capital (Lin, 2001). In other words, it is a set of ego-centered social relations which can bring resources to the focal person. In the following, I will call it egocentric guanxi network.

Why is it called ―network composed by trust relations‖? Granovetter (1985) argued in an article titled Economic Action and Social Structure: The Problem of Embeddedness that trust was the very mediate variable between resource exchange and social ties, and that the level of trust determines how resources are exchanged. Since relationships in China are full of social exchanges, trust plays a critical role in them. Without trust, there is no resource exchange in guanxi. That is why I can define Ren Mai as an ego-centered social network composed by trust relations.

What then is trust? This is a very big question that deserves much time to discuss. Briefly, trust can be categorized into trust in the broad sense and that in the narrow sense. What Granovetter talked about is the latter, which is called real trust, while what people usually employ is the former. Real trust is based on interpersonal relations, social network structure, identity and common vision, rather than power relations, institutions, general morality, and deterrence methods, such as hostage.

With regard to trust in the broad sense, your actions are predictable for me, so I know what you will do next. I as a teacher, for example, ask my assistant to get some tea for me, and he/she will always do a good job as I expect. That is because I hold the power in the school. Such a relationship is not built upon real trust since there is no risk, according to Granovetter. Williamson (1995) referred to such a relationship as ―calculative trust‖ or it can be called

―deterrence trust‖ (Shapiro，Sheppard and Cheraskin, 1992）. And this is the concept of trust used in the game theory. In other words, one party is sure that the game has not ended and that, to secure greater benefits in the subsequent rounds of the game, the other party will behave in a more cooperative manner. In the example mentioned above, the gaming relationship between the

assistant and I comes to an end as soon as he or she graduates from the school. By this time, he/she will not necessarily get some tea for me if I fail to leave any influence. When it comes to cooperation between states in the ancient times, the kings often sent to the other state one of their princes as a hostage to signify that ―I will not deceive you, because I will suffer a heavy loss if I do.‖ Such a scenario is built not upon real trust, but upon the power over me.

And there is a second scenario – that is, assurance (Yamagishi and Yamagishi, 1994; Yamagishi and Cook, 1998) – on the side of trust in the broad sense. This broad-sense trust is based on network closure and no choice. If I, again for example, want someone to fetch some documents from my office, but only one student knows where the office is, then I would have no choice but to have him do this even though I know that he is clumsy and may be unable to find the documents. This is assurance, also known as committed relation: You opt to believe someone because you have no other choice. This situation occurs in a large number of family businesses. A man in a family-business, for example, may have no confidence in his brother's ability, but he has to, under pressure from the family, let the latter do a particular job. In this case, I can't but trust my brother, since I don't have other choices in the familial closed network. A committed relation bonds two persons together without the possible choice to break up the relationship. And assurance is built upon this committed relation, rather than real trust, according to Granovetter.

Real trust exists only when you make a choice, at certain risks, from among a number of options. I ask the students in the classroom, for example, who is willing to fetch the documents for me. And I select one student immediately after several of them lift their hands. This suggests that I trust him more than others.

Trust can also be categorized into generalized trust and particularistic trust. Specifically, generalized trust refers to trust without particular targets, while particularistic trust targets only specific persons. Simply speaking, with generalized trust, you trust even strangers; and with particularistic trust, you trust only those with whom you have particular relations. Generalized trust is based upon general laws and morality. In other words, people trust a stranger, since his/her behaviors are under the monitoring of laws and morality. When it comes to overall generalized trust, China (including Taiwan and Hong Kong) takes a place almost in the middle of all the measured nations, according to a World Bank survey on the overall macro-level social capital of these nations. Among them, nations in Western and Northern Europe take the highest places. Iraq and some African countries take the lowest places.

Particularistic trust is based upon particular relations. Examples include trust in the narrow sense that Granovetter talked about, or real trust, and what Williamson referred to as ―personal trust‖, neither of which is based upon power or assurance.

In the case of China, trust is based upon things that vary with relationships.