Communicating through networks: Chinese business people’s views on engaging in business with foreign firms

The growing Chinese economy has attracted foreign ventures from around the world to engage in business partnerships with Chinese firms. However, many foreign businesses confront the liability of foreignness of operating in China. This paper examines how cultural, institutional, and socio-economic influences are communicated through Chinese business people’s intentions to engage in business with foreign firms. Interviews and a survey were conducted with business executives across different industries and regions in China. The findings show that Chinese business people’s intentions to engage in business with foreign firms are most likely to be influenced by the extent of personal trust, institutional network ties, government support, and common understanding of business norms. This study generates insights on how foreign ventures can minimize the liability of foreignness and effectively manage business relationships with Chinese partners through effective communication.