21st Century Human Value Forum Andong, 29. Mai 2015 Prof. Dr. Markus Taube

1. A Note on the Similarities and Differences between Chinese Guanxi-Networks and Korean Yongo-Networks 21st Century Human Value Forum Andong, 29. Mai 2015 Prof. Dr. Markus Taube

2. Informal Social Networks Are they all the same? Markus Taube – University of Duisburg-Essen

3. Space for Variety: Parameters for Idiosyncratic Network Design Markus Taube – University of Duisburg-Essen

4. guanxi- and yongo-Networks Common Ground: Reciprocity and Club-Characteristics • Cooperative behavior becomes the dominant strategy in one-period games (unique transaction between club members) since these unique games are bound up in an iterative system of multiple games (transactions) with other club members. • The fast flow of information among network members is crucial for the ordering mechanism to work efficiently. Markus Taube – University of Duisburg-Essen

5. guanxi- and yongo-Networks Core Difference: Tie-base • yongo • guanxi • Identity – Naturally Determined Segregation • yongo networks are pre-defined, “natural” structures into which individuals are born. There is hardly any possibility of conscious, goals-oriented yongo-”creation”:- hyulyon family and blood ties • - jiyon ties based on same hometown- hakyon ties based on attending the same educational institution (at the same time or not) • Identity – Perceived Similarity • guanxi networks are in principle based on personal relations marked by specific identity creating elements which are either “natural” or “created”:- origin in the same village or region, - served in the same military unit, - belonging to the same party unit, - graduated from the same school, • - same experiences in life and/or work- friendship and acquaintance • - overlap of friends and acquantancesetc. Markus Taube – University of Duisburg-Essen

6. guanxi- and yongo-Networks Differing Architectures: Network Character • yongo • guanxi Decentralized network architecture Egocentric network architecture Markus Taube – University of Duisburg-Essen

7. guanxi- and yongo-Networks Differing Functionalities: Network Principle • yongo • guanxi • Immutable and Irreversible – Cause-based • yongo relationships are not purpose-based by nature but rather conventional social relationships individuals are born into • Cooperation and the provision of services to co-network-members is a natural obligation and independent from any bilateral credit/debt balances • Outsiders are strictly discriminated against. They cannot become network members in the future. -> Strong particularism! • Utilitarian – Purpose-based • guanxi-networks are not simply ‘brotherhoods of friends’ bound by loyal friendship and free of any economic interest. • It is rather the mutual exchange of services and the acceptance of abstract debt obligations that provides the main integrating force within a guanxi-network. • Outsiders are discriminated against,but not alienated as they are potential new network members • -> Weak particularism! Markus Taube – University of Duisburg-Essen

8. guanxi- and yongo-Networks Further Differences: Openness – External Bridging yongo-networks are rigid. They are based on life-long lasting “natural” relationships. An existing set of network-relations does not change in the course of time. There exists virtually no possibility to establish formal bridges/alliances with other yongo-networks. However, the three dimensions HHJ may allow for overlaps and cross-network links guanxi-networksare amorphous. The reach of a guanxi- network can be expanded by the inclusion of new members as well as shrunk by neglect of network relations or expulsion. Bridges/alliances with other guanxi- networks are possible. Markus Taube – University of Duisburg-Essen

9. guanxi- and yongo-Networks Towards the future – Open Questions • Given their significant structural differences as well as varying roles in society and economy, in which direction will guanxi- und yongo-networks develop in the coming years? • Are changes in the external environment (rising economic complexity and fragmentation; growing individualisation, etc.) impacting on the viability of these networks? • What importance does the functional value of network-transactions play? • How strong is the social embeddedness of these networks and in how far will this determine their prevalence in changing societies? Markus Taube – University of Duisburg-Essen

10. University of Duisburg-Essen Mercator School of Management IN-EAST, Institute for East Asian Studies Chair of East Asian Economic Studies / China Prof. Dr. Markus Taube markus.taube@uni-due.de Markus Taube – University of Duisburg-Essen • 10