Chinese Diaspora Entrepreneurship, Development, and the World Capitalist System

Diaspora 6:2 1997 Chinese Diaspora Entrepreneurship, Development, and the World Capitalist System Paul Bolt United States Air Force Academy1 The Chinese Diaspora and Mainland China: An Emerging Economic Synergy. Constance Lever-Tracy, David Ip, and Noel Tracy. London: Macmillan Press; New York: St. Martin’s Press, 1996. In the summer of 1997, two issues involving diaspora Chinese captured headlines across the United States. The first was the return of Hong Kong to Chinese control after more than a century of British rule; coverage of this issue focused not only on the future of human rights in Hong Kong, but also on the close economic linkages between Hong Kong and China and on the importance of Hong Kong to China’s economic future. The second was the scandal involving alleged illegal contributions of foreign funds to the Democratic and Republican parties in the United States. Senate hearings in the cases of both parties centered on political contributions funneled through wealthy diaspora Chinese entrepreneurs. Republicans tried especially hard to demonstrate that China had orchestrated an attempt to illegally influence the US political system, using diaspora Chinese as intermediaries. To the consternation of a great many Chinese living in the United States, the proceedings raised questions regarding the loyalty of diaspora Chinese and their connections with China, as well as reviving stereotypes of shadowy and mysterious connections among ethnic Chinese.2 In this climate of increased interest in the Chinese diaspora, Constance Lever-Tracy, David Ip, and Noel Tracy provide a timely analysis of the economic links between mainland China and the Chinese diaspora, as well as of the effects of such links on China’s economy. Focusing on transnational (as opposed to interstate) relations between entrepreneurs, the authors take a multidisciplinary approach to the topic, attempting to overcome the barriers that divide the academic disciplines as traditionally conceived. Nevertheless, the study is not all-encompassing and the work tends to focus on an issue that might be defined as the “sociology of transnational diaspora business,” with an effort to tie the findings to theories of political economy.3 xxxxxxxxxxxx 215 Diaspora 6:2 1997 The three authors address three main themes in this work (16). First, they attempt to demonstrate that Chinese diaspora capitalism has unique attributes that have a profound effect on world capitalism . This unique category of capitalism is defined largely by transnational linkages among diaspora Chinese that are used extensively in business. Second, the authors describe the important role that the Chinese diaspora has played in China’s recent development, as well as the role that economic opportunities in China have had in forwarding the economic interests of diaspora capitalists. Third, the book addresses the question of economic scale, especially as it relates to issues of development and success in the current world capitalist environment. Here, the authors argue that large corporate size is no longer necessary to compete in the global economy, and probably is a liability. The primary conclusion of the work, which ties together all three of the above themes, is that “the linkages established between diaspora capital and entrepreneurship and the booming economies of the towns and villages of the coastal provinces along China’s east coast are the key to China’s economic miracle and the continuing success of the economic reform process in China” (x). The key contribution of Chinese Diaspora is its illustration of the way in which diaspora capitalists have contributed to China’s development. This point is often ignored or downplayed in analyses of China’s economic growth. In terms of investment and export generation, the impact of diaspora capitalists has been tremendous: they have contributed over three-quarters of foreign investment in China. However, as the authors make clear, diaspora entrepreneurs have also had an impact on China’s economic development through their modeling of successful management and marketing techniques . Thus the diaspora has contributed to both the “hardware” and the “software” of China’s economic development. Much more controversial are the authors’ assertions that the success of Chinese diaspora enterprises brings the future of large, bureaucratic multinational corporations (MNCs)4 into question. Certainly the Chinese diaspora has led the way in investing in China, but generalizing from...