Concern has been expressed in many parts of the world that community relations in rural areas are breaking down, making issues such as rural environmental degradation harder to resolve without external regulation. Guanxi is a specific Chinese idiom for characterizing social networks, as a broad term to represent existing relations among people, which can be loosely translated as ''relationship''. Based on a case study of an underdeveloped mountainous area of Southern China, this paper examined the problem from the perspective of guanxi, and explored the impacts of internal group differentiation catalyzed by pig farming pollution and the subsequent influences on the distribution of costs and benefits of different shareholders. It was found that the guanxi in the village were changed from blood relationship centered to economic interest centered. This disparity exerts a significant influence on the distribution of costs and benefits of pollution control and exacerbates environmental inequalities. This means that pig farmers dominated the narrative of pig farming pollution, while the ordinary villagers chose to suffer without protesting, which hinders the advancement of pollution control, and pig farmers took the benefits of weak pollution control and managed to transfer the external cost to others, while others became direct victims. The paper concludes that the rich become richer and the poor become poorer in both economic and environmental perspectives. It is strongly suggested that guanxi should be integrated into the consideration and decision-making process of rural environmental governance in order to guarantee the efficiency and efficacy of its implementation.
Keywords: China; cost and benefit sharing; environmental equality; guanxi network; pig farming pollution.