The rise of capitalism in China -- one of the world's fastest growing economies -- affects politics, markets, entrepreneurship, property rights and social structure, scholars from around the world agreed at the Conference on Chinese Capitalism, held April 20-21, in the A.D. White House.

The conference, organized by Cornell's Center for the Study of Economy and Society, was among the first held in this country to discuss the rise of China's free enterprise and market economy. It was attended by scholars from China, as well as Sweden, England and the United States.

Of the conference's six panel discussions, one on April 21 focused on markets and social structure. Presenters agreed that in the growing labor sector, the use of social networks in job searches is becoming more common.

In his presentation, "The Rise of Guanxi in Chinese Transformational Economy," Yanjie Bian of the University of Minnesota said his research shows that using social networks to search for jobs has risen in recent years as the rate of job turnover also increased. The use of guanxi, roughly comparable to the Western idea of social networking, is increasing in China, he said, because of the growth of institutional uncertainty and market competition in the nation's economy. With future reforms, however, he added that it is unclear how the role of guanxi will change. Some believe that as workers gain more credentials and China moves closer to a market-driven economy, guanxi will become less significant.

Zun Tanga, a Cornell sociology graduate student who presented his research, "Networks, Trust and Exchange," said that as the market economy grows, employers will be under greater pressure to perform and will have less incentive to trade favors in hiring and more incentive to hire based on skills. However, this does not eliminate the importance of guanxi, he said. Tang hypothesized that trustworthy and docile employees continue to be hired through kinship, and ethnic and professional networks. His surveys suggest that in the uncertainty of market transition, trust is an important component in hiring managers, as is control when hiring lower-skilled workers. He concluded that although favor exchange may have weakened in China's transitional economy, there is still significant motivation for employers to recruit through their social or business networks.

Papers presented at the conference are available at http://www.economyandsociety.org.

Jack Hoge '07 is a writer intern at the Cornell Chronicle.