SOSC 300K

1
SOSC 300K

• Lecture Note 12
• From the East Asian Miracle to the Rise of
  China

2
Main topics

• 1. Review East Asian development from the World
  War II the current wave of globalization and the
  rise of China
• 2. Theoretical concept on an economic region
  (Fernand Braudel)
• 3. The empirical discussion on Hong Kong and the
  Greater China Economic Sphere (Gary Hamilton)
• 4. Transnational capitalism (Hsing You-tien,
  Vivien Wee)

3
The East Asian Miracle (review)

• 1. Economic recovery of Japan from the 1950s
  Japan became the flying geese of other Asian
  countries
• 2. The four tigers
• 3. Postreform China (from 1978) and Southeast Asia

4
Capitalism

• Gary Hamiltons concept of capitalism is adapted
  from Fernand Braudels theory
• The lowest level--material life everyday
  economic activities, barter, face-to-face
  exchange, etc.
• The middle-level--market economy economic
  exchange through the market institute perfect
  competition
• The highest-level--capitalism the layer of
  monopolistic commerce the attempt for some
  people (particularly political or economic
  elites) to control the economic activities

5
Demarcating an economic unit

• Nation-state or any political sovereignty is not
  an absolute line to demarcate the boundary of
  economic activities
• Cf. Immanuel Wallersteins world-system paradigm
• In Hamiltons words, dont think of capitalism
  in terms of countries, but rather think of
  capitalism in terms of people, firms, money,
  products, industries, and the interrelationships
  among these (Hamilton, 1999 14)

6
Maritime China as an economic unit

• The historian Anthony Reid applies the concept to
  demarcate the region around the South China Sea
  as the economic zone of maritime China between
  the 16th-19th century
• Hamilton follows this concept to demarcate this
  region as the region of Greater China Economic
  Sphere where Chinese capitalism nurtured

7
Two trajectories of Asian capitalism

• A. Chinese model based on bottom-up individual
  and family-based strategies of seizing
  opportunities wherever they exist (family
  enterprises)
• Featured by small and medium-sized firms
  family-centric business networks

• B. Japanese model top-down corporatist
  strategies of linking state administrative
  capabilities with elite economic opportunities
  (e.g. the formation of zaibatsu)
• Industrialization

8
Maritime Asia under two trajectories of Asian
capitalism
The Japanese Empire 1943
9
Hong Kong and the Greater China Economic Sphere
(before W. W. II)

• Hong Kong was the center of Chinese capitalist
  expansion in the region from the early 20th.
  Century
• Before World War II, most Chinese firms in Hong
  Kong were owned by people from or still living in
  districts in the Canton delta
• These people jointly owned sets of firm including
  lodging houses, restaurants, insurance companies,
  import/export trade agents, banks, and investment
  and loan companies
• These firms were designed to facilitate the flow
  of human and materials from Canton through Hong
  Kong to the rest of the world

10
Example of a Canton-based factory in pre-war Hong
Kong

• The Chow Ngai Hing Knitting Factory
• Founded before 1911 by Chow Song Ting (???) in
  Canton
• Set up the Hong Kong factory in 1927
• In 1934, the Shanghai office and the Singapore
  office were set up
• Source CMU Zhinan, 1936 Section Yi and Section
  Bing-8

Source Xinjiapo zhonghua zongshanghui guohuo
kuoda zhanlan tuixiao dahui tekan, Oct. 1935
11
Hong Kong and the Greater China Economic Sphere
(before W. W. II)

• Hong Kong served as a capitalist
  funnelremittances of money from Cantonese
  emigrants in Southeast Asia through Hong Kong to
  their home counties in Canton
• In the golden age of Chinese bourgeoisie in
  early twentieth century China (defined by
  Marie-Claire Bergere between 1919 and 1927),
  Cantonese were the largest group of businessmen
  in Shanghai
• --The Cantonese gathered in the Houkou (??)
  district in Shanghai

12
Hong Kong and the Greater China Economic Sphere
(after W. W. II)

• Hong Kong as an exceptional place where Chinese
  capitalism continued operating
• --the Communist China cut off the link with the
  external world
• --Spore and Taiwan local capitalists had to
  give way to state capitalism
• --Chinese capital in Southeast Asian countries
  suppressed under the practices of economic
  nationalism (ethnic Chinese enterprises were
  discriminated institutionally)

13
Hong Kong and the Greater China Economic Sphere
(after W. W. II)

• What contributed to Hong Kongs rapid
  industrialization after the war?
• Manufacturing capital moved from Shanghai
• Ample labor supply from refugees from mainland
  China
• Respond to the changing global economy through
  linking up with the big buyers in the U. S.,
  Great Britain, and Germany

14
Hong Kong and the Greater China Economic Sphere
after the 1980s

• Economic reform in China foreign capital was
  welcomed to invest in mainland China from 1978
• Political stability and the relax of economic
  nationalism in Southeast Asia (particularly
  Thailand, Malaysia, Indonesia, and Singapore).
  Many of these overseas Chinese capital flew to
  mainland China
• Hamilton With Canton as its production base,
  Hong Kong is again the center of this capitalist
  development

15
Foreign investment in China by states
1991 1992 1979-92
National total 100 100 100
Hong Kong 60.6 69.0 64.0
Taiwan 11.2 9.4 7.7
USA 4.5 5.3 7.0
Japan 7.1 3.7 5.8
Hsing You-tien, 1996 241.
16
Institutional settings of the Greater China
Economic Sphere

• Hamiltons assumption Chinese ethnic ties could
  be directly translated into business connections
• Hsings approach the institutional settings
• 1. Economic processes are socially structured by
  ethnicity, gender, and other social and
  institutional elements
• 2. If the interpersonal networks are socially
  embedded and territorially specified, what would
  happen to the networks when the capitals expand
  from one territory to another?

17
Institutional settings

• Economic autonomy of Chinas local governments
• 1. the decentralization of economic resources
  from the central government to local governments
  at the county and municipality levels
• Fiscal sovereignty and responsibility of local
  governments, esp. the Canton and Fujian provinces
• These two provinces contributed to a huge lump
  sum of the revenue to Beijing these two
  provinces could also retain a large portion of
  the foreign exchange which they earned from
  exports, tourism, and share of the remittances
  their residents received from abroad
• Count on the business investment of overseas
  Chinese capital to fulfill the provincial fiscal
  responsibility

18
Institutional settings

• 2. the increasing economic autonomy of local
  authorities and the active role played by local
  officials
• Local officials could also be qualified partners
  for foreign capitals to establish joint stock
  ventures in China
• Many Taiwanese and Hong Kong business people
  liked to make flexible deals with low-level
  mainland Chinese officials

19
Cultural affinity

• Overseas Chinese business people such as those
  from Taiwan and Hong Kong can take advantage of
  the reform economy the linguistic and cultural
  affinity
• Interpersonal relationship
• Flexible interpretation and implementation of
  laws (????????)
• Gift exchange overseas investors would be asked
  to sponsor an officials personal expense (such
  as the education fund for his child)the vague
  boundary between public and private spheres
• Chinese from Taiwan and Hong Kong feel that they
  can know the cultures better than other Chinese
  from Southeast Asia ?

20
Cultural Economy

• The anthropologist Vivien Wees approach to
  explain the current wave of the growing Chinese
  business connections in the Greater China
  Economic Sphere
• 1. Non-economic considerations come into play in
  economic practices
• these non-economic considerations include
  ethnicity, nationalism, and kinship

21
Cultural Economy

• 2. these cultural phenomena do not exist in a
  static, primordial state
• for example, ethnic Chinese from Southeast Asia
  might lose their Chinese identity after W. W. II.
• The World Huaren Federation does not even have
  Chinese-language web site

22
Wees View on Chinese capitalism

• Chinese capitalism not the manifestation of
  primordial identity and essentialist culture
• Rather, any such phenomenon should be
  contextualized in the macro-politics of
  ethnicisation and the micro-politics of social
  interactions and individual agency
• Though ethnic identity has long been regarded as
  the primordially embedded in business practices,
  ethnic identity can also be nurtured
  instrumentally to facilitate business practices
• ?

23
The momentary growth of fraternity

• Flexible citizenship anthropologist Aihwa Ong
  proposes to illustrate the local responses of the
  growing China-Southeast Asian economic ties
• Although citizenship is conventionally thought
  of as based on political rights and participation
  within a sovereign state, globalization has made
  economic calculation a major element in disporan
  subjects choice of citizenship, as well as in
  the ways nation-states redefine immigration laws
  (Ong 1999112)
• Ethnic Chinese from Southeast Asia, Hong Kong,
  Taiwan and elsewhere now seek to benefit from the
  rise of China
• ?

24
Chinese Ethnic Ties in the Making of Capitalism
in China

• Essential Chineseness?
• Cultural identity and ethnic affinity

• Instrumental/flexible identity?
• Economic strategies, profit-maximization?