Before the financial crisis of 1997, the rapid development of several Southeast Asian economies (Singapore, Thailand, Malaysia, Indonesia), coming in the wake of East Asian
‘successes’ (Korea, Taiwan, Hong Kong), had started a hunt for the keys to this success.
The crisis, in turn, has generated interest in the causes of economic collapse in several Southeast Asian countries as well as South Korea. Of the many common factors among the Southeast Asian cases, one stands out as apparently particular to the region: the prominence of people of Chinese descent in business. Although comprising a (sometimes tiny) minority in every Southeast Asian country except Singapore, ethnic Chinese are said to own and control a disproportionate amount of private domestic capital in each of the rapidly developing economies, and several of the others as well. When this observation is added to the Chinese character of two of the three East Asian NIEs and the acceleration of growth in China itself, it looks like a tempting line of investigation.
Laying aside the question of how ethnic Chinese business might have contributed to the growth to be explained, much of the literature to date addresses a question that is as old as European colonialism in Southeast Asia:1 ‘why do the Chinese dominate business?’
A difficult question,2but what is important for our purposes is that it is impossible to answer in the terms in which it is posed. In investigating the problems and progress of the recent literature on overseas Chinese business, we will approach the question, ‘why do the Chinese dominate business?’, not as a question to be answered but more as a problem to be solved. The question conceals a number of other terms that need to be teased out and examined. We will find that the original terms in which the question is posed obscure both the relations of Chinese business to the broader political and economic environments, and the organising principles of the phenomenon ‘Chinese business’ itself.
These organising principles comprise a kind of ‘social know-how’,3which is formulated, transferred and expressed in ‘Chinese’ terms, but which is not essentially Chinese.
The import of seeing ‘Chinese’
The terms of the question, ‘why do the Chinese dominate business?’, beg another question, ‘who are the (overseas) Chinese?’. This second question has produced many
descriptive responses, and a number of tentative definitions,4but the root of the question has yet to be addressed: precisely what kind of category is ‘the Chinese’? It is, on the one hand, a generic label for an ill-defined group, but since, as Weber remarks (1968:395),
‘the concept of the “ethnic” group…dissolves if we define our terms exactly’, what the term denotes depends more on the argument being made than on any real-world referent.
To illustrate, let us examine what ‘the Chinese’ does and does not define, and how the category operates.
For one thing, ‘Chinese’ does not define nationality, at least not with reference to people of Chinese descent in the ASEAN countries today. In every one of these countries except Brunei,5 almost all the residents of Chinese descent are citizens.6As citizens, they are variously Thai, Malaysian and so forth. Thus, if the level of analysis is national- political, and ‘Chineseness’ is introduced, it has to be introduced on the left, as it were:
Chinese (or Sino-) Indonesians, not Indonesian Chinese. While states might have their own definitions of ‘Chinese’, these do not apply consistently across the region or across time.
Once upon a time/the Chinese’ defined a race, unproblematically. Race was a supposedly biological category, and as such, was totalisingly ascriptive. Nowadays,
‘race’ has, with a few troubling exceptions, been replaced by ‘ethnicity’, and it is usually in ethnic terms that ‘the Chinese’ are defined, though not without caveat. Yoshihara, for example, states that ‘the Chinese in this book [!] come close to the people who are called
“ethnic Chinese”’ (Yoshihara 1988:37). After some elaboration, he concludes:
The Chinese thus include three groups. One comprises immigrants from China who speak Chinese [sic]; another those who were born in Southeast Asia and speak Chinese; and the third, possibly the largest, consists of people who were born in Southeast Asia (sometimes in China) and do not speak Chinese, but who may have Chinese values (or the values of their Chinese fathers, which are substantively different from those of the indigenous population) and/or personal ties with the first two groups, which they may use to advantage in business.
(Yoshihara 1988:39, emphasis mine) Were this a definition, it would be a remarkably inclusive one. Leaving aside the conflation of many Chinese languages into one, we may nevertheless easily imagine a Southeast Asian who speaks a Chinese language but is not a ‘Chinese’, or a Southeast Asian ‘who may have Chinese values…or personal ties’ to ‘Chinese’ but is not a
‘Chinese’ herself. And what about Southeast Asians with ‘Chinese’ mothers, but non-
‘Chinese’ fathers?7 Yoshihara’s is not a definition, however, but a’practical guide’, and the guideposts are markers or signs of ‘Chineseness’, signs whose meanings are ambiguous, situational and contingent. We still do not know what Chinese ethnicity is, but we are told how to recognise it.
There are a couple of neat efforts at deconstructing ‘Chineseness’: Kasian Tejapira’s
‘Pigtail’ (1992), and a paper by Vivienne Wee (1988). The gist of their arguments is that
‘Chinese’ is a historically constructed identity; that the agent that initially defines
‘Chinese’ is external; and that the mechanism of definition is political. Historically, among emigrants from China, narrower identities had a greater pull. These identities, sort
of sub-ethnicities, were similarly contingent, and their naming is significant. Individually, their names (e.g. Hokkien, Teochew) referred to locations in China, specifically to territorially-defined political units of various sizes, and by extension to the people who came from them and the languages (‘real’ ones this time) those people spoke.8The lack of consensus among scholars about how to term these identities collectively (speech groups, dialect groups—see Skinner 1957:35) points to their uncertain location in tacitly national frames of reference.
To inquire into the persistence or disappearance of these sub-ethnic identities would take us far afield.9 The point is to problematise the ascriptive and categorical characters of the term ‘Chinese’. Let us imagine, for a moment, that the waves of colonialism had washed over south China after 1842, creating British Guangdong, French Fujian, etc., and then receded, leaving independent states behind. ‘Cantonese’ might then be a nationality at home, and an ethnicity elsewhere, while ‘Chinese’ might be analogous to
‘European’—that is, an abstract idea, detached from any ascriptive ethnic identity (or threatening political entity). Why then does ‘Chinese’ seem so natural? Why does a term that should be abstract and descriptive (Chinese ‘style’ capitalism, like European ‘style’
colonialism) tend to reify into something essential and ascriptive?
I would suggest that this way of seeing homogeneous, eternal ‘Chinese’ was originally a European, especially Dutch and British conceit, a conception born of the wider world- view and the mercantile organisation and orientation of the great trading companies—and not from ‘European culture’ as such (see Anderson 1991:167–8, on Chinees and sangley).
In the 1600s, the English and Dutch East India Companies roamed the world as mercantilist teams, competing on a protonational basis with, among others, the Spaniards and the Portuguese (who had previously divided the world between themselves, with the blessing of the Pope—thus giving the Iberian project an unbounded religious legitimation). To the northern Europeans, ‘the Chinese’ were another ‘team’.
Whatever the supposed motivational force of the Protestant ethic, Protestantism was having a systematic effect on the organisation of societies in northern Europe. It contributed to the erosion of ascribed, stratified status (the estates) by alternatively legitimating achieved status. While the estates in Europe would ultimately be replaced by a less rigid system of classes, this new evaluative framework placed a premium on vertical, ascriptive differentiation between peoples, and by extension, races. The trick of colonialism was to make race the ‘legitimate’ basis of a hierarchical, ‘caste’ system (see Wertheim 1964:73–5). Wertheim argues:
But without a certain degree of acceptance of mutual roles and a measure of internalisation of the values imposed by the dominant group, the social structure could not last even for one day. A society held together only by force is a rare phenomenon indeed. The secret of any domination is a partial imposition of one’s own value system upon the members of the dominated groups.
(Wertheim 1964:68–9) This sounds rather like Gramscian hegemony (Gramsci 1971:12). Thus, both evaluative frameworks, ascriptive status (expressed in racialism) and achieved status (implied in capitalism), were contained in colonialism, creating tension in the colonial system.
European attitudes towards Chinese economic activity were strikingly ambivalent.
Though European profits often depended on Chinese economic activity, colonial rulers’
anxieties focused on ‘the Chinese’ as the most ‘capitalist’, and hence, most upwardly mobile subject group: Chinese business may have threatened European interests, but it certainly threatened white status.
Still, our concern here is not so much where this way of seeing ‘Chinese’ came from, but how it operates analytically. The problem lies not with abstractions as such—where they describe patterns, processes, relations or structures—but that some abstractions (the Chinese, the state, capital) are treated as actors, and monolithic ones at that. Ruth McVey makes this point:
Generally, studies dealing with economic transformations are peopled with abstractions…whose struggles determine the outcomes. In the presence of such titans the endeavours of mere humans seem the dithering of ants [M]uch of the argument…has turned on…questions about the doers rather than the done.
(McVey 1992:8) In some cases, it is the state that appears as ‘a monolithic and decisive entity’ (McVey 1992:14)—its internal conflicts and its unintended effects disregarded—while in others, the Chinese and capital play similar roles.
The question, ‘why do the Chinese dominate business?’, simply cannot address these concerns. Without, I hope, being too mechanical, we can restate the first half easily enough as, ‘how does Chinese (style) business…’, but the second half threatens to become an absurdity: ‘…dominate capital’! The issue here is one of ownership and control, and it is usually handled within the framework of political economy.
Controlling ownership and owning control
While works in a political-economic vein tend to focus on capital, capitalism and the state, we should note that even among these, the category ‘Chinese’ frequently intrudes.
Yoshihara (1988:37) and Robison (1986:271) devote separate chapters to ‘Chinese capital’ and ‘Chinese-owned capital’ respectively. Suehiro (1992:39–40) plays down the Chineseness of capital, but still uses the ethnic character of ‘dominant capitalist groups’
to distinguish Chinese from European and Thai sakdinagroups. Hewison (1989:72), for his part, endeavours to resist intrusion by ethnic or cultural theories into his argument, but still notes that, under the first Phibun regime, ‘the ethnic Chinese remained economically dominant’.10 With the exception of Yoshihara, however, these are all single country studies, in which specific governments enacted and expressed specific (if variable) definitions of ‘Chinese’: and so ‘Chinese’ enters the analysis through state policy, rather than as a category a priori. ‘Chinese’ then, again except for Yoshihara, may denote, historically and nationally, specific political classifications of fractions of capital.11
While some theories of capital emphasise capitalists expressing their common interests as a class in conflict with other classes, other approaches to political economy divide capital into fractions, usually by sector, industry or even size, on the grounds that these
fractions will have competing interests, and that this competition will be expressed politically as well.12 Commonly, however, capital is also divided according to the (supposed) political loyalties of its owners, with the expectation (or fear) that these loyalties will somehow be expressed economically. To the extent that economies and markets are separated by political boundaries, these distinctions are seen to have real consequences. The concern, most aggressively argued by dependency theorists, that foreign firms will repatriate their profits, subordinate local capital and suborn local political elites is an example of this.13 The discursive distinction between foreign and domestic capital is a powerful one, even if the interplay between ‘interests’ and
‘loyalties’ remains poorly thought out. Deciding into which category ‘Chinese’ capital falls, however, is not easy.
This is a point of contention in the literature that evokes some forceful assertions.
Suehiro reasons:
However, although the dominant domestic capitalist groups of Thailand have always been ethnic Chinese, they have mostly been locally born, hold Thai nationality, and use the Thai language; younger business leaders have been educated entirely in Thai schools. Unlike the pre-war period, most Chinese business leaders hold their economic stake within the country. For these reasons, I do not define these capitalists as alien but include them as ‘domestic’
or ‘Thai’ businessmen.14
(Suehiro 1992:39–40) McVey asserts:
In this connection we need to remember that the region’s Chinese are a settled minority and function as domestic capitalists. Hence, Southeast Asia’s capitalism is not affected systematically by the ethnicity of its business class.
Certainly the international character of the overseas Chinese diaspora gives a particular fluidity to Southeast Asian Chinese business organisations and capital placement, but this does not constitute a fundamental difference…
(McVey 1992:18) Hamilton (1996b: 331), on the other hand, declares: ‘Chinese capitalism is nota domestic capitalism (i.e. the product of indigenous economic growth), but rather is integral to world capitalism itself? Hamilton clearly means something quite different by ‘domestic capitalism’ (something ‘authentically indigenous’?), and we may wonder how such a thing could not be integral to ‘world capitalism’, with all accumulation contained within the domestic market, thus a separate system? Or does he mean a (culturally) different system? We can see the sort of signs that fly around the term ‘domestic’: national identity of ownership, placement of investment, residence of ownership, ‘function’, and on the other side, ‘indigenousness’.
The definitional blurring of Chinese capital, capitalists and capitalism is again a matter of optics. One distorting factor here, in addition to those examined earlier, is the conflation of nation with state (see Anderson 1990:94–6). Regimes themselves are prone
to identify both policy goals (which may express parochial interests), and the ‘interests’
of the state as an institution, with national interests, in order to borrow some of the nation’s legitimacy. In a way, this is a natural process: the right to rule of most states today depends on their ‘marriage’ to a nation. What is interesting is how many scholars—
particularly those concerned with policy or else inclined to view the state as a ‘monolithic and decisive entity’, as actor—see their subjects through the same state-centric, ‘nation- state’ optic.
As a result, although the national status of Chinese capital in the ASEAN countries should be uncontroversial, in some cases, it is not. Where the political loyalties of Chinese capital are suspect, as in Malaysia and Indonesia,15 the domestic status of Chinese capital comes into question, and the questioning is often publicly expressed in nationalist rhetoric. Once the optic is corrected, however, it should become clear that Chinese capital has to be ‘domesticated’, not because it is alien in relation to the nation, but because, to the state, it is ‘wild’.16 State-owned and state-connected enterprises are common in Southeast Asia, partly in order to ‘domesticate’ and subordinate not just Chinese capital, but capital itself. Where non-state local capital is mostly Chinese-owned, two kinds of potential ‘disloyalty’ intersect, and are compounded by the competitive interests of state capital. Nowhere, even in Thailand or the Philippines, has a national bourgeoisie yet been able to politically express its interests as a class over those of government elites with consistent success: the ‘wildness’ of Chinese capital reflects these elites’ anxiety that capital may not only escape subordination to the state, but may, in turn, subordinate the state to its interests.
Another factor contributing to the gap between a national definition of ‘domestic’ and a state-centred definition is the identification of the state with an alternative source of legitimacy: indigenism.17Indigenousness is a constructed political identity through which a group justifies its control over a territory by prior (and so primary) claim to possession of that territory. Prior possession is the basis of ownership most widely recognised as legitimate, while ownership is similarly the most widely recognised claim to legitimate control.18 The trick lies in making this claim exclusive. One way of finessing the trick is the discursive conflation of ethnic identity with territory. Terms meaning ‘sons of the soil’ are not rare in post-colonial societies (see Horowitz 1985); pribumi in Indonesia and bumiputra in Malaysia have both served to wed an ascriptive identity to the land. To the extent that indigenism appropriates the two standard determinants of nationality, jus sanguinis and jus soli, and makes them interdependent, claims to citizenship and full participation in national sovereignty on the basis of jus soli alone are pre-empted:
sovereignty ‘belongs’ to the rightful owners of the country.19
But indigenism, where it occurs, involves not just ownership and control of the country, but of the country’s wealth as well. Wealth in capitalist Southeast Asia represents social prestige as well as economic power. In the context of competition between indigenous and non-indigenous groups, controlling wealth and the ownership of wealth are political concerns.20It is the success of some ethnic Chinese that challenges indigenous prestige. The legitimacy of Chinese ownership of wealth becomes questionable, and the language used to question it is similar to that once used by colonial administrations to describe the success of their non-European competitors.21Businesses,
industries and whole economies are said to be ‘in the hands of, ‘controlled’ or
‘dominated’ by Chinese. This language does a number of things. First, it erases the legitimacy of ownership. Second, it elides the workings of capitalism: a firm may be controlled through minority ownership, or the market for a particular product may be dominated through a commanding market share, but these processes are not the issue.
What the language implies is power, not just the use or employment of capital, but total and possibly co-ordinated control: ‘the Chinese’ (as one) dominate (by means of unspecified, but nonetheless threatening) business, etc. Poorly documented statistics regarding the ‘Chinese share’ of national wealth are cited everywhere; statistics regarding the concentration of wealth within the Chinese community, on the one hand, or nationality without regard to ethnicity, on the other, are unavailable or unremarked.
What is disturbing, is the persistence of this discourse outside countries where indigenism is an issue, and its prevalence throughout the literature on Southeast Asian Chinese business. While it is quite possible that in some of the literature, the impulse is to question the legitimacy of capital ownership itself, and not Chinese ownership as such, the rhetorical effect is much the same: a monolithically conceived group is sinisterly linked to a monolithically conceived source of power and prestige. Why this is so is hard to say, except that McVey’s ‘titans’—in this case, the state, the Chinese, and capital, and as we shall see, culture—seem powerful enough to take over the studies of which they are the subjects.
Organising legitimacy
The contemporary Western faith in impersonal relations and administrative institutions obscures their normative character, to the point where the system they constitute appears as natural fact. A degree of common acceptance, however, is required to allow a social system to ‘last even for one day’ (Wertheim 1964:68). Acceptance involves recognition of the legitimacy of the framework in which social relations and behaviour are evaluated.22 Systems of social evaluation reflect, legitimise and reproduce systems of social relations. They are the media in which political and economic power are organised and perpetuated.
European colonialism introduced new evaluative frameworks, along with new political and economic systems, to societies in Southeast Asia. These included the privileging of upward mobility implicit in capitalist activity, but also the racialist categorisation of peoples that restricted and channelled mobility. The colonial division of labour (which was reproduced in similar form in Siam)23directed immigrants from China into certain economic roles, among them wage labour and trading. Often unintentionally, this encouraged upward mobility within the limits of these roles. But systems of social evaluation and social relations that immigrants brought from China contributed to the formation of new institutions overseas in the colonial context and the post-colonial era.
The question is what kind of institutions, and how they have developed.