| January 2007
CHINA: A HUMAN JUGGERNAUT
The status of China as the world’s new commercial giant would have been impossible without the investments of the Chinese Diaspora in South East Asia. Even today, with their role as bridges to the outside world rather then as investors, these Chinese minorities abroad constitute a formidable fifth column for Peking.
Over a relatively short period the main wealth of South East Asia has become concentrated in the hands of the ethnic Chinese. Their fortunes peaked during the golden years of the Asian boom. Frugal, skilled and laborious the Chinese in the Nanyang (Southern Ocean) took advantage of an unprecedented era in Asia's history, a boom in the 1990s that was mainly of their making.
The most significant achievement of the Nanyang Diaspora, one that will haunt history, has been the financing of China's economic miracle.
Peking's startling economic evolution, a phenomenon that superseded all predictions and remains unrivalled in human history, was only possible thanks to the vast influx of money from the Overseas Chinese in South East Asia.
DURING THE 1990s, THE CORE YEARS OF THE ECONOMIC MIRACLE, THEY SUPPLIED 80 PER CENT OF ALL THE FOREIGN FUNDS INVESTED IN COMMUNIST CHINA.
The wealth of the Diaspora - and not the comparatively paltry funds from the USA, Japan or Western Europe - became the real locomotive for Deng Xiaoping's vision of China as the leader on the world stage. Like most Chinese he saw such a role consistent with the size of China's population and the past achievements of the Chinese people. Deng's Great Leap into what he called "Socialism with Chinese Characteristics" unleashed the commercial energy of his people, an energy that had been anesthetized by Maoist dogma.
Unfortunately the Great Leap into western style capitalism has also created a sense of nationalism reinforced by the clout of an Armed Forces modernized by the same method. Today China feeds its people on a dangerous dish of destiny, a fare that more than once inflamed global conflicts in the past.
In this power game of the Oriental Giant the Overseas Chinese have played a key role as financiers and as a bridge to the outside world.
The Diaspora is by no means a homogeneous society. Its members came from different parts of China and their loyalties remain first to their families, then to their clans and villages and only finally to their Chineseness. Over the last decade however their commercial networks have linked South East Asian nations with an invisible ring of economic interests forged by merchants who live in different parts of the Diaspora but collaborate like secret societies or commercial Mafias.
The lock and key on this ring is China.
Despite its occasional saber rattling Peking does not have to conquer its Asian neighbors by military force. The Overseas Chinese have already commercially colonized virtually all of these neighbors. In fact the Bamboo Network, perhaps the world's most formidable commercial Mafia, easily exceeds the assets and commercial activities of the Jewish Diaspora.
An Australian Government study in the late 1990s found the Chinese in South East Asia generated a GNP two thirds that of mainland China while Hong Kong, Taiwan and Singapore have combined foreign reserves larger than the United States or Japan and almost equal to that of 1.2 billion Chinese.
The 56 million Chinese in South East Asia - 9 per cent of the region's population - have estimated assets of $2,000 billion. The Asian economic meltdown has hardly affected the wealthiest of the taipans. Before the boom went bust they had moved the bulk of their assets out of the region, mainly to the United States.
The statistics are even more baffling if one remembers the Chinese are a small, frequently persecuted and despised minority among the Asian nations whose economies they totally dominate today.
In Indonesia about three per cent of the population (six million) have Chinese origins yet this minority controls 78 per cent of the private capital of the country and over 50 per cent of the country's trade.
Eleven per cent (6.37 million) of Thailand's population is ethnic Chinese but they own 62 per cent of the country's private economy and nine tenth of all investments in commerce and manufacturing. Half the financial resources of Thai banks and the majority of corporate assets are in Chinese hands.
In the Philippines 1.2. to 1.5 per cent of the population are ethnic Chinese but they control an estimated 55 per cent of the private economy and own 120 of the country's largest 300 enterprises.
In Malaysia the Bumiputra Law has tried to limit Chinese ownership and give preference to business concessions for Malays. Around 33 percent of Malaysians are ethnic Chinese but control 65 per cent of the private economy and 44.9 per cent of all companies despite the limitations of the New Economic Policy.
Vietnam sent out to sea 500,000 ethnic Chinese during the exodus of the Boat People in the late 1970s. But the four per cent of the population which is Chinese and had remained have already cornered an estimated two thirds of the fledgling private economy, mainly in Saigon.
Three out of four Singaporeans are Chinese and own 95 per cent of the island-state's economy. Ninety-nine per cent of Taiwanese are of Chinese descent and they own 100 per cent of the economy. Until it was handed over to China in 1997 the British colony of Hong Kong had a population 97 per cent Chinese who had a 90 per cent share of the colony's wealth.
As a minority, hated and envied for their disproportionate wealth, the Nanyang Diaspora increasingly looks to China for protection. Sooner or later anti-Chinese riots like those in Indonesia could afford Peking the excuse to intervene by force in the affairs of its neighbors and so extend disputed territory like the oil-rich Spratly Islands in the Nanyang, territory already shown on Chinese school maps as part of Greater China.
Before the accumulated overseas wealth modernized the Motherland, China was a backward, isolated and ignorant society. Then, in 1979, Deng advocated his Open Door policy. It took another decade - and a muscle flex on Tiananmen Square - before Deng's policy bore fruit and attracted the flood of investments from the Nanyang Chinese who, unlike western entrepreneurs, saw in the Tiananmen crack down a guarantee for stability with a party determined to remain in power.
The flood of investments was not unusual. Funds from Overseas Chinese have steered the destiny of China for the last century. Donations from the Diaspora accelerated the fall of the empire, financed the Republic, padded the anti-Japanese war chest and built the Other China, the one in Taiwan. Now Diaspora money has metamorphosed the Mainland.
The wealth of the Chinese abroad is due to their dedicated struggle to possess and control the riches and resources of the countries in which they have settled. This struggle is as fascinating as the futile efforts of these countries to keep the Chinese settlers out or dispossess those who gained a disproportionate share of wealth.
In this struggle to control resources and dominate the economy the Chinese at home and abroad have never shown mercy for competitors or concern for the environment.
They are truly a human juggernaut.