Social capital, guanxi and political influence in Chinese government relations

•This study explores an under-examined "vertical" dimension of social capital as a mechanism of political influence in China.•This study contributes to enriching the underdeveloped literature on government relations, public affairs, and/or lobbying.•Individual-level social capital (e.g., guanxi) can be strategically developed into organizational social capital.•Social capital enables corporations to exercise agency in negotiating policy within pre-existing, vague regulatory environment. Social capital has emerged as a promising theoretical approach to understanding political influence in the public relations literature. However, the rationale of using social capital to influence corporate government relations in authoritarian societies is indistinct. To remedy this, we integrate Bourdieu’s (1986) and Lin’s (2001) social capital theories to explore how applying a variant form of social capital (e.g., guanxi) might shape corporate government relations in authoritarian China. A multi-method, qualitative approach was employed involving 44 interviews, participant observation and document review. The findings highlighted an underexamined “vertical” dimension of social capital (i.e., links with authority in a hierarchy), which enables corporations to exercise agency over the pre-existing and often vague regulatory environment. This study adds a new perspective to social capital with hierarchical guanxi that enriches our understanding of guanxi-based political influence in Chinese corporate government relations.