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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 26, No. 2, pp.203-237
ISSN: 1225-0279 (Print)
Print publication date 30 May 2013
Received 21 Sep 2012 Revised 15 Feb 2013 Accepted 26 Feb 2013

Guanxi in Chinese Commerce: Informal Enforcement in Spanish Philippines

Tina S. Clemente
Assistant Professor, Asian Center, University of the Phillippines-Diliman, U.P. Campus, Diliman, Quezon City, MM, 1101, Phillippines, Fax: +63-2-9203535 tinaclemente2012@gmail.com

JEL Classification: N85, D23, C61, L14, D86

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.

Keywords:

Ethnically homogeneous middleman groups, Informal sanctions, Enforcement

Acknowledgments

The research draws from Dr. Clemente's dissertation work and succeeding research activities. The work done on this article was funded by the Ph.D. Incentive Grant, administered by the Office of the Vice-Chancellor for Research and Development, University of the Philippines-Diliman. The author acknowledges Dr. Janet T. Landa for her valuable comments.

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