In China, the Practice of Using Guanxi Is an Integral

question 64

Multiple Choice

In China, the practice of using guanxi is an integral part of doing business both to those firms already in the country and those working to get their firms into the country. Guanxi is built on reciprocity meaning:

• A) You pay for another person's business debts to help them get back on their feet.
• B) That certain parts of businesses must be registered first with the government.
• C) Paying a bribe to an official is acceptable as part of the company's first obligation to enter the country.
• D) If someone does a favor for you, you will be expected to return that favor in the future including access to partnerships, contracts and government officials.
• E) Not paying a bribe and convincing a local company to illegally sell materials to them, since demanding bribes is unethical behavior.

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Definitions:

Total Income

The sum of all earnings or revenue received by an individual or an entity, including wages, profits, rents, and other forms of earnings.

Capitalists

Individuals or entities that own capital goods or investments, and use these to produce goods and services for profit.

Rent

A regular payment made by tenants to landlords for the use of property or land; in economics, it also refers to earnings in excess of the minimum amount necessary to keep a factor of production in its current use.

Proprietor's Income

Income earned by the owner of a sole proprietorship from the business's net earnings.