The world's successful diasporas
Words by: World Business Published: 03-Apr-07
OVERSEAS CHINESE
A former king of Thailand once famously referred to the overseas Chinese as the "Jews of Asia". But the overseas Chinese have been far more successful in their domination of many of Asia's economies than the Jews were in Europe. So perhaps the king had it wrong: he should have said that the Jews are the overseas Chinese of Europe.
Apart from Japan and Korea, business in Asia is ethnic Chinese business. In south-east Asia, they dominate business despite forming only a small minority of the population. Approximately 6% of the combined population of the five main south-east Asian economies (Indonesia, Malaysia, the Philippines, Singapore and Thailand) is ethnically Chinese, but that 6% controlled around 60% of the region's private corporate wealth at least until Asia's economic crisis of 1997-98. This tiny minority accounts for almost all of south-east Asia's known billionaires.
The dominance is perhaps at its most extreme in Indonesia. Three quarters of the country's top 300 big business groups are either wholly or partly owned by Indonesian Chinese businesspeople - not a bad result for an ethnic group that comprises just 3% of the population.
About 35 million ethnic Chinese live in south-east Asia today. They are most assimilated in Thailand, where, due to a high degree of intermarriage, the precise number of Chinese is impossible to estimate, but elsewhere the degree of intermarriage has occurred only at the edges. The majority of Asia's overseas Chinese emigrated from China comparatively recently - mostly in the 19th century and early 20th century; often their departure from China was as a result of famines or other upheavals. China has 29 provinces, but the vast majority of the overseas Chinese come from just three: Guangdong and Fujian provinces on the South China Sea in the south-east corner of China, and Hainan province, an island off the southern tip of Guangdong. China might have over a billion people, but the overseas Chinese have cultural, family and language ties with relatively few of them.
The early migrants were usually dirt poor when they first left the mother country, and over time the cumulative effects of high rates of mortality and the self-selection that migration entails, whereby those most able to succeed are the ones to leave, meant that south-east Asia soon played host to a hardened ethnic minority, well equipped at survival and very successful in business - because the best way to survive was to make money.
One of the key factors in the Chinese success was how they settled across Asia. They did not pour into a particular location, but fanned out across the region, thus ensuring that they had a ready-made network of international connections within which they could trade and raise capital. The legacy today is a web of personal connections that allows commerce to proceed on the basis of trust - and if anyone betrays the trust of another, that person is soon frozen out of trade and other business opportunities. It is a powerful enforcer.
Commerce like this does not need sound laws to function. This is why the Chinese have been so astoundingly successful in south-east Asia. For much of the last century, practically all the region was relatively lawless and this has made the networks invaluable. The Singaporean who trades with a Bangkok relative or other contact knows he will be paid. Pre-existing networks of trust mean opportunities can be exploited quickly. while their Western competitors must arrange buyers and letters of credit, losing time and opportunities.
The ability to do business in those business environments that are so rough that they are no-go areas for anyone else means that the Chinese get in on the ground floor when an economy is about to take off. It is the early bird that catches the highest margin. The overseas Chinese have been instrumental in building up the economies of Cambodia, Burma, Vietnam and even Laos. They were the first investors to go back into China, using their family and ancestral links to scout out opportunities, while multinationals were still trying to find consultants who could do the same.
Dialect is important to understanding the Chinese outside China because it is a key signifier for different cultural groups under the broader umbrella of Chineseness. Mandarin is the language of northern China and is the native tongue of almost three-quarters of all Chinese who live in China, but it is the ancestral tongue of only a tiny proportion of the Chinese who live in south-east Asia - perhaps less than 5%. Because most overseas Chinese have their origins in China's south-east, their languages are the various dialects of that part of China. However, the written form of the language is the same. In the absence of a common third language or an interpreter, someone who speaks Cantonese will be able to communicate with a Mandarin speaker by exchanging written notes.
- Hokkien is the dialect for those with origins in southern Fujian province
- Fuzhou is spoken by those from around Fuzhou city in the north-east of Fujian, Hokchia is the closely related dialect of those from the area around nearby Fuqing and Henghua is the dialect of those from the Putian area, south of Fuzhou
- Hainanese (or Qiongwen) is the language of those from Hainan province
- Cantonese is the ancestral dialect of those with origins in much of Guangdong and Hong Kong
- Teochiu (or Chiu Chow, as it is spelt in Hong Kong) is spoken by those from the Shantou area of eastern Guangdong
- Hakka (or Keh) is the language of a group of Chinese sprinkled throughout northern Guangdong, southern Fujian and further inland
Particular dialect groups tend to occupy certain business sectors: the Hokchia-speaking people, for example, were rickshaw drivers and this explains why the largest manufacturer of tyres in Indonesia today is the Gajah Tunggal Group, owned by the Hokchia Chinese Nursalim family - they started by supplying and repairing rubber tyres for rickshaws. Similarly, the medicated ointment Tiger Balm was first manufactured in the 1920s by the Hakka Chinese Aw family, who lived in Burma at the time. Historically, Hakka families ran Chinese herbalist and pharmaceutical shops.
In alertness to information such as this can help outside investors to truly understand business in south-east Asia today and how it came to be the way that it is.
OVERSEAS CHINESEDialect From where Settled Business namesgroup in ChinaHokkien Fujian Malaysia, Kwek family (Hong Leongprovince Philippines, Group); Lucio TanSingapore, Myanmar (Philippines Airlines,Fortune Tobacco)Fuzhou Fuzhou Indonesia, Malaysia, Lim Sioe Liong (Salimdistrict (especially Sarawak) Group); Robert Kuok (Kuokof Fujian Singapore Group)Henghua Putian area Indonesia, Singapore Riady family (Lippoof Fujian Group)Hainanese Hainan Malaysia, Indonesia, Lamsam (Thai Farmersisland/ Singapore, Thailand Bank)provinceCantonese Guangdong Malaysia (especially Gordon Wu (HopewellKuala Lumpur), Holdings)VietnamTeochiu Northern Thailand, Singapore, Chearavanont family (CPGuangdong Malaysia, Laos, Group); Li Ka ShingCambodia (Hutchison Group)Hakka Guangdong Malaysia, Indonesia, Eka Tjandranegara (Muliaand Fujian Myanmar, Singapore Group)
