Catalyst for Change

Chinese Business in Asia

Thomas Menkhoff, Hans-Dieter Evers, Chay Yue Wah, Hoon Chang Yau

• Publisher: WSPC
• Year: 2013
• eBook ISBN: 9789814452434
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

This book serves as a textbook for courses on Asian studies with a focus on ethnic Chinese entrepreneurs and business management in Asia. It provides a comprehensive Asian perspective on the organizational peculiarities and changing business practices of ethnic Chinese businesses and their leaders who continue to form the backbone of Asia's dynamic economies. The book features selected chapters written by reputable scholars on Chinese business, covering diverse and yet closely related topics such as the role of ethnic identity, trust, guanxi, Chineseness, leadership, change management, learning and knowledge management in organizations owned and managed by ethnic Chinese.

Contents:

• • Introduction: Coping with Change — Understanding Ethnic Chinese Business Behavior (Thomas Menkhoff, Chay Yue Wah, Hans-Dieter Evers and Hoon Chang Yau)
• The Story of the “Chinese Overseas” Implications for Identity, Business and “Chineseness”
  • The Sea as Paddy: The Making of Fujian as a Transnational Place (Jessica Chong)
  • What Chinese Am I? The Use of Heritage for Economic Imperatives in Singapore (Daphnée HL Lee)
  • Managing Change in Asian Business: A Comparison between Chinese-educated and English-educated Chinese Entrepreneurs in Singapore (Thomas Menkhoff, Ulrike Badibanga and Chay Yue Wah)
  • Chinese Business in Malaysia: Ethnicity and Knowledge Management (Chin Yee Whah)
  • Evolving Chineseness, Ethnicity and Business: The Making of the Ethnic Chinese as a “Market-Dominant Minority” in Indonesia (Hoon Chang Yau)
• The Management of Business Networks and Change:
  • Trading Networks of Chinese Entrepreneurs in Singapore (Thomas Menkhoff and Chalmer E Labig)
  • Improving Small Firm Performance through Collaborative Change Management and Outside Learning: Trends in Singapore (Thomas Menkhoff and Chay Yue Wah)
  • Ethnic Chinese Family-Controlled Firms in Singapore: Continuity and Change in Corporate Governance (Lai Si Tsui-Auch and Dawn Chow Yi Lin)
  • Building a Successful Brand: The Story of Eu Yan Sang (Jessica Chong, Willem Smit, Thomas Menkhoff and Christopher Clayman (with Richard Eu)
  • Generational Change in Chinese Indonesian SMEs? (Juliette Koning)
  • The Salim Group: The Art of Strategic Flexibility (Marleen Dieleman)
• Leadership, Knowledge and Learning in Chinese Business:
  • In Search of “Asian” Conceptions of Leadership with a Focus on Mindfulness (Chay Yue Wah, Charles Chow, Hans-Dieter Evers, Lee Cher Leng, Thomas Menkhoff, Jochen Reb, Jayarani Tan and Elfarina Zaid)
  • Exploring Lee Kong Chian's Knowledge Leadership Style in Nam Aik Company (Dai Shiyan and Zhang Guocai)
  • Organizational Learning Approaches of Small and Medium-sized Enterprises: A Comparative Study of Chinese Firms in Singapore (Thomas Menkhoff)
  • Understanding the Role of Cultural Orientations in Students' Predispositions toward Knowledge Transfer in Project Teams: Evidence from Singapore (Thomas Menkhoff, Chay Yue Wah and Hans-Dieter Evers)
• Asian Business in Local Contexts:
  • Urban Property Development in Malaysia: The Impact of Chinese and Malay Conceptions of Space (Hans-Dieter Evers)
  • Informal Banking and Early International Entrepreneurs: The Case of the Chettiars (Jayarani Tan and Tan Wee Liang)
  • The Internationalization of Mainland Chinese Businesses (Hinrich Voss)

Readership: Undergraduate students, researchers, managers and professionals who are interested in Asian business and management.

Part 1

The Story of the “Chinese Overseas”:
Implications for Identity, Business
and “Chineseness”

Chapter 1

The Sea as Paddy: The Making of Fujian
as a Transnational Place^*

Jessica Chong

Since the 1980s, Fujian Province in China has been known as the main source of Chinese illegal migrants in the United States. In recent years, Fujianese immigrants’ destinations have become increasingly varied, with some embarking on transnational entrepreneurial activities in Africa. While most narratives about Fujianese migration sensationalize the role of human smugglers and use economic theory to try to make sense of this large-scale movement of people, this chapter emphasizes that Fujianese transnationalism has had at least 500 years of history. Through fieldwork in Fujian and documental research, this chapter shows that a long historical perspective is needed to explain why Fujian is a transnational hub with a vast and dynamic global reach.

1.Introduction

In June 1993, a ship named the Golden Venture ran aground on Rockaway Beach in Queens, New York. The ship carried 286 illegal Chinese migrants, mostly from Fujian province. Passengers evacuated the ship and tried to swim through frigid waters to shore; sadly, ten drowned. Televisions across the country broadcasted dramatic images of Coast Guard members dragging the Chinese migrants to safety. Shivering, naked, and dwarfed by their rescuers, some clung to small grocery bags that held their belongings (Smith, 1997). This incident fits neatly into the stereotypical image of impoverished people from the “third world” coming to the “promised land” in search of the “American dream,” effectively crystallizing what Americans thought about Chinese migrants. Media coverage of the Golden Venture also fanned the flames of resentment toward snakeheads, the notorious human smugglers generally depicted as indifferent and cruel profiteers who treat humans as cargo (Kwong, 1998).

Today, Fujianese migrants account for 43 percent of illegal Chinese migration. But Fujianese migration is much more than simply a story of snakeheads and desperate migrants. Nearly 15 years after the Golden Venture incident, I found myself in my father’s ancestral village Xishancun, in Fuqing County the county from which most of the Golden Venture migrants had originated. The people in the village were not as impoverished as the Golden Venture migrants had appeared in the media, and their migration trajectories were not singularly motivated by desperation and necessity. Furthermore, the villagers had mobilized their social capital to move to places as far flung as South Africa, Lesotho, and Nigeria to pursue opportunity. Their destinations were not confined to the “promised land” of the United States. In fact, for centuries, sizeable populations of ethnic Fujianese have lived in Southeast Asian countries like the Philippines, Singapore, and Malaysia (The Taipei Times, 2007).

One of my initial observations was that Xishancun had been literally emptied of young people. Over the last decade or so, many Xishancun villagers had migrated to countries in Africa on family support, opening shops of their own. With the remittances that these entrepreneurs sent home, their families had built opulent four or five-storey houses in Xishancun. The buzz was thick in the humid July air: Africa had become the place to go.

In recent years, scholars have tried to understand Fujianese migration using several conventional theories, some of which provide better explanations than others. The theory of cumulative causation stipulates, for instance, that migration sustains itself by creating more migration, forming what Massey describes as “migration networks” (Massey et al., 1998). These networks link previous migrants in a particular destination to potential migrants in their communities of origin. In Fujian, these migration networks were even arguably native to the social structure.

Pieke and Thuno (2005) posit that “emigration from [Fujian] is strongly embedded in local political, sociocultural and economic institutions and histories” (p. 485). In order to move away from a Eurocentric vantage point to explain this movement, they use the term “ Chinese globalization,” which they conceptualize as “multiple, transnational social spaces straddling and embedded in diversifying smaller regional or national systems [... and] part of a unifying global system” (Pieke et al., 2004, p. 11). They also note that migration is “as much about the details of local places and communities as it is about the networks and connections linking these places to a transnational social space” (p. 6). These are important insights.

Other theories, moreover, are less effective. The economics-based neoclassical migration theory maintains that individuals choose to emigrate based on income differentials, moving from low-wage countries to high-wage countries (Massey et al., 1993). Unfortunately, this theory fails to explain both the recent Fujianese migration to countries whose currencies have less purchasing power than the Chinese renminbi (RMB), and the observation that economic development tends to actually increase the impetus for emigration (Massey et al., 1998). Meanwhile, proponents of world-systems theory suggest that transnational migration is a result of industrialization in China’s reform period, a product of “Western capitalism,” wherein farmers have been forced from their land and the increased competition for factory jobs has become an impetus for emigration (Chin, 1999, p. 16). This argument, however, fails to take into account the long history of the Fujianese transnational experience, which goes back several centuries.

Indeed, while Pieke and Thuno provide a critical foundation for understanding the composition of the transnational social space, the long historical creation of this transnational social space lacks mention within their work. Thus, my own research is guided by the question of how past Fujianese migrations and current Fujianese migrations are linked.

In this chapter, I argue that Fujian’s history contributes to the “embeddedness” of transnationalism in its people. While I do not wish to paint Fujianese emigration as a uniform phenomenon, I argue that it has been sustained over the centuries in three main ways: one, it has been largely entrepreneurial in nature; two, it has occurred outside of official control; and three, it is sustained by regional and kinship networks. In doing so, I hope to establish the local context for Fujianese migration, both in terms of history and institutions.

This chapter is primarily informed through documental research and my own fieldwork in Xishancun village, Fuqing County, Fujian province. With regard to Fujian’s maritime history, I draw on Carolyn Cartier (2001), who argues that the South China coast is a “historic maritime cultural economy whose conditions in many ways challenged the orthodoxies of agrarian Han society” (p. 31). She also argues for the importance of regional identity in China. Wang Gungwu (1992) provides much of the historical background on Hokkien merchants. Both Cartier and Wang emphasize the “otherness” of southern China and particularly Fujian, and how this has been conducive to an entrepreneurial spirit.

In the next section, I discuss the historical background of Fujian with an emphasis on its entrepreneurial maritime activities and the beginnings of Fujian’s transnational existence. In particular, I look at tribute trade and the growth of commercial (illegal) trade in Fujian. I also examine why these trade networks emerged in Fujian rather than elsewhere. In the third section, I discuss the origins of Fujianese transnationalism in Southeast Asia. In the fourth section, I discuss social practices in the village of Xishancun, particularly as they relate to contemporary China and “Chinese globalization.” I look at the mechanisms that facilitate their transnational trajectories to such varied places. Finally, in the conclusion, I explore how this project is related to the broader geopolitical climate and provide some commentary about the importance and implications of a long historical perspective.

2.The Sea as Paddy

Mounds of discarded oyster shells dot the paths in Xishancun. Today, oysters are farmed by men in waters about half an hour away by motorcycle. Once the oysters are hauled back to the village, women spend their days shelling them in the shade. These oysters are a small piece of evidence of Fujian’s long maritime history, and are emblematic of the Chinese adage that the “sea is paddy to the Fujianese” (Pan, 1999, p. 30). In this chapter, I discuss Fujian’s geography and the beginnings of its trade history, the importance of Zheng He and his legacy, and the origins of an overseas Chinese trade network dominated by the Fujianese.

Located on China’s southeast coast, Fujian is encircled by mountains and girded by seas (jinshan dahai,

) (Pan, 1999, p. 30). Roughly 95 percent of Fujian’s total area is occupied by mountains, while the remaining area consists of generally infertile coastal plains and river valleys. Only eight percent of Fujian, including terrace farms on mountains, is arable (Clark, 1991, p. 9). Before the arrival of Han Chinese settlers from the north, the Fujian region was inhabited by indigenous peoples, who, according to Clark, likely lived in the mountains and depended on hunting and gathering for subsistence. It was during the fall of the Han dynasty in the late second century that many Chinese flooded to the south from the north — not because it was a prosperous region, but because it provided “refuge from chaos” (So, 2000, p. 15). Overpopulation on limited and infertile lands has been a recurrent theme in the province’s history. It was natural, therefore, that the Fujianese turned to the sea as their paddy.

During the Yuan Dynasty (1271–1368), the Fujianese city of Quanzhou became a major port for foreign merchants, supplanting Guangdong province’s hub of Guangzhou as the empire’s largest port. Quanzhou boasted connections to Japan, Korea, the Philippines, Indonesia, the Arabian Peninsula and even the coast of Africa. Marco Polo and Ibn Battuta are said to have remarked that it was the greatest port in the world (Abu- Lughod, 1989, p. 336). While Fujianese merchants were able to develop their maritime skills in a “relatively free, officially backed trading atmosphere” during this period, this policy changed with the fall of the Yuan (Wang, 1992, p. 83). At the beginning of the Ming Dynasty (1368–1644), Emperor Hongwu banned private trade as part of a policy of isolation aimed at self-sufficiency, while allowing the continuation of tribute trade under which mutual gifts were exchanged for no commercial gain. It was in this context that Zheng He embarked on his seven famous voyages between 1405 and 1433. It is widely assumed that Zheng He’s voyages were for the sole purpose of exploration, but at least one historian, Edward Dreyer (2007) argues otherwise. During the first voyage, Zheng He’s armada, boasting 27,000 “mostly military personnel,” destroyed a Palembang-based fleet of pirate ships which had been preying on merchant ships (p. 31). His fourth voyage took him to Hormuz, the great trading center of its region. These events lead Dreyer to suggest that Zheng He’s voyages may, in fact, have been commercial in nature.

Whether or not Zheng He’s voyages were for trade or exploration, they “educated many more Chinese about the trading opportunities at a time when private trade was being destroyed and future generations of those who were drawn to trade privately overseas were being intimidated” (Wang, 1992, p. 85). Additionally, economic growth from newly discovered cash crops, such as hemp, silk, sugarcane, litchi, and cotton (So, 2000, pp. 28–29) fostered population growth, straining the land area and leading the Fujianese to turn to the seas for profit. Shipbuilding and navigation techniques improved, and an organized private (and thus illicit) trade network flourished. Moreover, Fujianese merchants recognized growing overseas demand for items like cloth, silk, and pottery and were eager to fill it (ter Haar 1990, p. 176). Private trade also flourished because of the acquiescence of nearby state officials. As Pan (1994) notes, “many of the mandarins in the southern ports were persuaded to turn a blind eye — how else were people to live?” (p. 6). As a result, large numbers of Fujianese merchants migrated all over the globe and started to dominate overseas trade, establishing particularly noteworthy presences in Taiwan and the Philippines.

Even as the Ming state turned inward once again in the mid-fifteenth century, imposing a series of bans on international trade, private sea trade showed few signs of stopping. In 1580, the Spanish Governor-General established a trading post for the Chinese in Alcayceria, Manila, permitting them to settle there permanently. Official Spanish authorization of Chinese settlement aimed to strengthen Spanish wealth; the Spanish wanted the ability to ship fine Chinese goods to the European market via Acapulco (Gambe, 2000). The Spanish also saw that they could gain from using established Chinese trading networks, which connected the Malay Archipelago, the Indo-Chinese coasts, China, and Japan, and they wished to capitalize upon the Fujianese’s willingness to bring porcelain and silk to the market. Many Dutch-supported merchant communities also came into being (Wang, 1992). However, the presence of a “well-organized, dynamic, and apparently prosperous alien group” proved at times to be a threat to the Europeans, so measures were taken to control the Chinese populations (Gambe, 2000, p. 13). In Manila, all Chinese were ordered to live outside the city walls in an area called the Parian and what is now the city’s Chinatown. The Spanish also repeatedly massacred the Chinese in Manila, and “a major bloodletting occurred” in Dutch Batavia in 1740 (Wang, 1992, p. 88).

Significantly, Ming officials “showed no interest in the Chinese overseas merchant communities, in part because trade and profit-seeking went against the Confucian tenets to which the Chinese polity adhered. Chinese trading abroad were on their own” (Wang, 1992, p. 90). The entrepreneurship of the Fujianese was distinctly homegrown and sustained by a wellestablished tradition of social networks.

Why was such a complex and successful system of overseas trade able to emerge out of Fujian? As Cartier (2001) notes, “it is important to see China how it sees itself — as a country of regions — and to ask questions about processes that create regional meaning and stitch China together as a coherent whole” (p. 38). Most of the knowledge we have inherited about southern China preserves the worldviews of the Chinese literati, who judged the south China coast in terms of the north. The coast, for example, “was not a landscape of desirability in traditional Chinese imagination” (p. 41), and in old Chinese maps, the South China Sea was depicted as especially fearsome. Furthermore, “strangeness about south China has been a type of otherness... that reminded imperial rulers and northern Han Chinese of the extent of the ordered world and the need to secure that world on its margins” (p. 45).

Becoming an independent kingdom during the tenth century was also a “major turning point” in Fujian’s history; its cities of Quanzhou and Zhangzhou were in frontier territories, with relative autonomy away from direct interference by court and provincial mandarins (Wang, 1992). It is therefore arguable that China’s isolationist policies through the centuries have had a negligible impact on Fujianese commercial activities. As a result, as Wang succinctly puts it, the Hokkien comprised “the majority of the overseas traders between the thirteenth and eighteenth centuries. They were also the most successful” (p. 97).

3.Fujianese Transnationalism in Southeast Asia

While China has volumes of historical records, few tell of the people involved in overseas trade, indicating the “low esteem in which t...

Table of contents

• Cover
• Halt Title
• Asia-pacific business series
• Title
• Copyright
• Contents
• Contributors
• List of Figures
• List of Tables
• Introduction
• Part 1 The Story of the “Chinese Overseas”: Implications for Identity, Business and “Chineseness”
• Part 2: The Management of Business Networks and Change
• Part 3: Leadership, Knowledge and Learning in Chinese Business
• Part 4: Asian Business in Local Contexts
• Index