Mixed Perceptions of Business-to-Government Guanxi in Tendering and Bidding for Infrastructure Projects in China

Guanxi is the Chinese word for personal relationships or connections. Infrastructure project procurement in China is dominated by the government, and the entire tendering and bidding process is subject to administrative control in which business-to-government (B2G) guanxi is thought to have a significant impact. To date, however, little is known of its impact and perception in infrastructure procurement. This paper aims to bridge this research gap through a questionnaire survey of 149 contractors' and consultants' perceptions of B2G guanxi in terms of its importance, mode of establishment, and impact on infrastructure bidding in China's eastern coastal cities. The results indicate that over half of the respondents surveyed consider B2G guanxi to have important benefits for current practice whereas others hold different perceptions. Four groups of perspectives are identified by K-means cluster analysis, ranging from a low/moderate perception of B2G guanxi (48%) to passive-high/positive-high (52%). A chi-square test suggests the differences between groups is attributable to the types of organizations involved, with contractors and quantity surveying consultant organizations placing significantly more emphasis on the benefits and establishment of B2G guanxi. Finally, the current informal tendering and bidding processes in China are questioned as a contributing factor and suggestions are made for increased government and legislative intervention, leading to a greater emphasis by bidders on improving their technical and management capacity in order to develop their competitive advantage in the market.