Chinese
migrants and the power of guanxi
By David Fullbrook
BANGKOK, CHIANG RAI, HONG KONG - Despite China's red-hot economy, more and more
mainland Chinese are moving to Southeast Asia, believing opportunities there
are golden and the lifestyle agreeable. Their money and shrew business skills
should serve the region's economies well. But their presence could sour
relations with Beijing if history repeats and locals turn resentful and
violent.
China's high, increasingly visible unemployment, cutthroat competition and
expensive bills in big cities are causing mainlanders once again to look south,
whether for a few years or indefinitely, just as their forbears have for
centuries. "In China there are too many people to compete with. They are
looking for new opportunities," says Dr James Chin of Hong Kong University's
Institute of Asian Studies.
Some squint through rose-tinted spectacles. "Mainland Chinese perceive the
world on two levels, one as many different countries, the other as just one
large economic opportunity," says Amon Apithanakoon, founder of Uniting
Chinese, an organization aiming to bring Chinese worldwide closer together and
foster Taiwan's peaceful reunification with the mainland.
Fewer, often bendable rules make business in Southeast Asia easier than in a
red-tape-choked China that sentences the corrupt to long jail terms and
sometimes subjects them to bullets. In Southeast Asia, few corruption cases
reach court, with heavy sentences hardly ever.
"A reason for investing in places like Cambodia and Laos is the incomplete
regulation, the flexibility provided by corruption," says Chin. The perception
is "if you know how to take advantage, manipulate this corruption, you can
succeed".
In the 18th and 19th centuries most Chinese brought only muscle to Southeast
Asia's plantations and mines. Today they bring money and know-how, even degrees
and white-collar pedigrees.
"Most of them are not very poor but not very wealthy either. They are just
running business, trading commodities from south China," says Chin. "Some of
them are very wealthy, the private entrepreneurs who were very successful in
China and are now trying their luck elsewhere."
Chin reckons about 15% of mainland migrants are wealthy entrepreneurs and
another 40% are traders pooling their money to build up business. Technicians
and managers recruited from coastal provinces to work in factories comprise
another 30%. The remainder include sex workers - willing and deceived -
teachers, reporters and publishers. "In Cambodia, for example, there are three
or four Chinese newspapers," says Chin.
Wealthier, better-educated migrants come from big cities, boom towns such as
Beijing and Shanghai, and duller places such as Liaoning. The rest are mainly
from China's southern provinces, including Yunnan, Guangdong and Fujian.
The power of guanxi
Ties between old Chinese communities in Southeast Asia and southern China
remain close, refreshed by each boat or airplane disgorging new migrants. Dr
Vorasakdi Mahatdhanobol, Chinese political economy researcher at Bangkok's
Chulalongkorn University, says these connections - guanxi - are crucial
for migrants.
This guanxi is costing some locals business. "Local traders thought the
Chinese would use them to trade with other places. But instead the Chinese
traders are bypassing Thai traders, working directly with other Chinese
businessmen around the world," says Wuttilert Narawitthayanurak, general
manager of Northern Intertrade and Service's Chiang Saen bureau, which handles
Mekong River trade between China and Thailand.
As China's and Southeast Asia's economies intertwine more, they invigorate old guanxi
and foster new ties - good and bad. In a not dissimilar way to business
consultants lubricating international commerce, Southeast Asian Chinese help
new arrivals find their feet. A few run trafficking rings, or deal with
gambling and prostitution.
Despite common impressions of success and wealth, many mainlanders struggle.
"If they knew this earlier, they wouldn't come," says Chin. "They say the law
is getting better in China. Some complain of being cheated by local Chinese."
Migrants from the north are not the only Chinese setting up shop in Indochina
and Myanmar. Chinese entrepreneurs from Malaysia and Singapore, along with
those who fled during the region's wars, have been moving in too. Their
experience and contacts across the Orient allow them to assist, and sometimes
exploit, mainlanders.
Thailand serves as a stepping stone
Easy tourist visas make Thailand a stepping stone to the rest of the region.
Human traffickers there are also well established. This year, under US
anti-trafficking laws, Washington once again threatened to downgrade Thailand
to Tier 3 status and impose sanctions.
Some mark time awaiting forged passports for their final journey to the West,
often assisted by traffickers. Others, in Thailand, Myanmar and neighboring
countries, pass through the migration laundry, emerging with residency visas,
identity cards or passports sold by crooked officials.
Such practices have encouraged mainlanders, often traders, to flood northern
Myanmar since 2001. Red carpets await wealthy mainlanders arriving in Yangon
from a government desperate for investment and stronger ties with ally No 1,
Beijing.
Vorasakdi says that of Chinese entering Thailand legally in 2003, an estimated
120,000 did not go home. Adding illegal overland arrivals, say observers, who
doubt any official estimates exist, pushes the total much higher. Many move on
to Thailand's neighbors or further afield, but the rest stay.
They are turning up in places not typically associated with fresh migrants,
such as Had Yai near Malaysia, and towns in central and northeastern Thailand.
Most still head for huge Chinese communities in Bangkok and nearby provinces.
Those with white collars work in offices for ethnic-Chinese bosses. Others fill
skilled niches, making tofu or selling Chinese goods and clothing, which are
now cheaper and more available than ever thanks to 2003's Chinese-Thai
free-trade deal.
"We don't have real statistics yet, but it is a concern of the people that with
the gates open more, Chinese will come - including illegal immigrants," says
Chiang Rai Senator Duanjai Deetes.
In northern Thailand feelings are mixed. "There has been increasing numbers of
Chinese moving in over the last three years," says Wuttilert. "People are still
optimistic that in the long run they will benefit from Chinese visitors and
investment. But they worry that in the future, with more and more Chinese, they
will take over some sectors of the economy."
That unease spans the community. "It's not only the urban people who are
concerned about rising China immigration, so are the hill people," says Ralana
Maleeprasert, head of the research and development section at the Ministry of
Social Development and Human Security. There is little appetite for resistance,
however. "Chinese immigration is inevitable. It depends on how the government
deals with it. It's important to prepare people, to educate them about this,"
says Sermchai Kittirattanapaiboon, president of the Chiang Rai Chamber of
Commerce.
Over the past few years some northern provinces have begun adding Chinese
writing to street signs. Students are dropping English for Chinese. Meanwhile,
officials pay mainlanders little attention, focusing instead on trying to
control Myanmar nationals, Khmers and Laotians by regularly herding illegals
back across Thailand's porous borders.
Perhaps because most Chinese are not competing with Thailand's poor masses and
can buy influence, they are able to avoid official attention. Thailand's
booming economy is greedy for skilled labor, pushing up wages. Educated
mainlanders help plug the gap and ease wage pressures. Their entrepreneurial
brethren contribute to growth.
A new Chinese mercantile class
In Cambodia, Laos and Myanmar, mainlanders are forming a new Chinese mercantile
class, the old having been destroyed by wars, and strengthening these
struggling economies. "They want to continue investing and expanding their
business in the area, building up a multinational business," says Chin.
In northern Laos, Chinese traders, construction bosses, engineers and skilled
laborers have been arriving for a decade invigorating society with new roads,
bridges and stores stocked high with cheap goods pouring out of China's busy
factories.
Chinese restaurants abound in Phnom Penh, where along major boulevards Chinese
is written larger than Khmer on almost every shop sign. Ethnic Chinese, mainly
entrepreneurs from Taiwan and Hong Kong, opened factories in Cambodia after
Vietnam's 1989 withdrawal. As China eased travel restrictions and relations
warmed, mainlanders followed, a mixture of managers, technicians and later,
entrepreneurs who came to displace the Taiwanese. Were it not for their capital
and acumen, Cambodia's only export would remain labor. "Without these Chinese
migrants, Cambodia would be dead," says Chin.
In the past, when waves of Chinese migration to Southeast Asia coincided with a
stable China and chummy political relations between the region's capitals and
Beijing, trade flourished and economies boomed.
Today is little different. Over the past decade, China's unstoppable economy
helped Southeast Asia weather 1997's economic maelstrom and fueled recovery by
gobbling up millions of tonnes of exports, much of which originated from firms
owned by ethnic Chinese dominating Southeast Asian economies.
Some, perhaps most, migrants, using banks or informal channels that avoid
official attention, send money home - to greatest effect in China's poor rural
districts where the economy is tepid.
However, while the migration appears good for business, it could cause
friction, especially if the pace quickens and locals feel they are losing jobs
or business. Already in northern Myanmar some talk of sending the new Chinese
packing one day.
Chinese pogroms have been a sad feature of the region's history over the past
few centuries, most recently in 1998 when baying mobs killed hundreds in
Indonesia. Should tensions erupt again, Beijing may not be able to stand idly
by. Fearing public demands for action during the violence in Indonesia, Beijing
gagged China's press, only relenting when news of the murders began leaking in
from the Internet.
In decades hence, a large migrant community that fails to assimilate may also
present a security conundrum for host governments, many of whom have faced
insurgencies supported, and even led, by some ethnic Chinese a few decades ago,
the consequences of which are hard to predict.
Conversely, during that time, new migrants, given their numbers, skills and
finances, could have a significant, lasting impact on Southeast Asia's economy
and society.
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