Guanxi in Chinese Commerce: Informal Enforcement in Spanish Philippines

Abstract

How did Chinese merchants remedy opportunism in a prevailing scenario of weak state enforcement during the Spanish period in the Philippines? The paper attempts to analyze 19th century historical accounts in elucidating how the utilization of guanxi sanctions provides useful insights in addressing the gap between state enforcement and property rights violation. These sanctions constitute informal enforcement among Chinese merchants based on personalistic ties. With credible enforcement, Chinese principals could manage networks that facilitated merchandize trade throughout the Philippines. By the 19th century, Chinese networks consisting of Chinese merchants and agents became crucial in large scale wholesale and retail trade.