Wealth hazards - Chinese citizens in Southeast Asia; includes related article about assimilation of Chinese peoples in Thai culture

National Review, Nov 21, 1994 by G. Bruce Knecht

Since the overseas Chinese are becoming the decisive factor in the remaking of China and their companies may well become the nation's biggest enterprises, their past experience may tell us a lot about the future shape of China's economy. The most obvious shortcoming is the dependence on family control: almost all Chinese companies are organized as family businesses, and very few of them have taken the crucial next step of bringing in professional management. That, in combination with a mindset that is tightly focused on the immediate term, may preclude the Chinese from building truly world-class companies. The overseas Chinese built their fortunes with giant monopolies in things like cement and tobacco," says Lloyd-George. "They think it could be the same in China."

Or, as an Occidental investor who works in Bangkok puts it: Their whole mentality is a trading mentality. It is still very hard to get them out of trading and into manufacturing, particularly if it requires research and development. If the payback goes beyond three years, they say, `Let's buy cheaper equipment.'"

And so China, revivified by the overseas Chinese, endowed with an endless supply of cheap labor, but unlikely to have much in the way of fixed investments, will likely become an economy of wily enterprises capable of rapidly responding to changing markets. But while that will move China a long way from where it is now, it will also make it difficult for the world's largest country to grow out of a dependence on lowcost labor. To advance further, China may have to go outside the family.

Thais That Bind

THE difference between Thais and Chinese, I was told, is all Tin the eyelids: Thai lids have epicanthic folds; Chinese lids do not. But although half of Bangkok's population is thought to be Chinese to some extent, the racial mixing has been so thorough that I could only rarely spot the difference.

Thais and Chinese began with the same ethnic roots. Most Thais descend from people who lived in southwestern China until they were forced southward by the Mongols. And in modern times Thailand has been working to eradicate the remaining ethnic distinctions by encouraging Chinese immigrants to take Thai names, to practice the Thai form of Buddhism, and to intermarry.

Starting in the seventeenth century, Thai kings began to view these immigrants as a commercial middle class that could fill the gap between aristocrats and peasants. With that in mind, Chinese businessmen were granted trading monopolies, and the most successful of them were ennobled. Their daughters married Thai aristocrats, and their sons were allowed to enter civil service, the traditional career path for the kingdom's best and brightest. The goal was to secure from the Chinese the benefits of their business acumen along with their allegiance.

Although no other nation has had anywhere near the same success in integrating Chinese, even the Thai-Chinese relationship has had its rough spots. By the 1930s, Chinese were thought to control about 90 per cent of Thailand's business activity. After a particularly massive wave of Chinese immigration, a feeling that Chinese were too rich and that they were no longer being sufficiently assimilated led to the enactment in the 1940s of several discriminatory laws. During the subsequent two decades, a new source of anti-Chinese sentiment arose: they were thought to be possible Communist agents.