Guanxi refers to a Chinese system of doing business on the basis of persona
l relationships, and it is representative of the way that business is done
throughout much of the non-western world. In this,paper we first evaluate g
uanxi from an ethical perspective, and then attempt to shed light on the so
urces of its economic advantages and disadvantages through the use. of a si
mple mathematical model, Finally, we point out how eastern and western busi
ness practices may already be converging toward systems based on more compl
ete models of trust to deal with the conditions of progress coupled with un
certainty that form our new economic reality.