Academic journal article Journal of Southeast Asian Studies

Chinese Enterprise in Colonial Malaya: The Case of Eu Tong Sen

Academic journal article Journal of Southeast Asian Studies

Chinese Enterprise in Colonial Malaya: The Case of Eu Tong Sen

Article excerpt

The economic performance of so-called 'dragon' economies of East Asia in the 1970s and 1980s was attributed by representatives of governments like Singapore and Taiwan to the role played by neo-Confucian values centred on social discipline, frugality, diligence and a collectivist ethic that emphasised the importance of the family. Amongst scholars, the culturalist perspective attracted a strong following, in contrast to the political economy and market approaches to explaining the rise of East Asian capitalism by focusing on the family firm, guanxi (relationships), trust and networking in business transactions. (1) Carried by what appeared to be an irresistible current of interest--in both social science and popular literature--in the spirit of East Asian capitalism, prominent and successful Chinese business personalities (present and past) were held up as exemplars of ethnic entrepreneurial dynamism in Southeast Asia. However, the euphoria of East Asian and Chinese capitalism in the preceding two decades and the celebration of their successful representatives were brought down to earth in 1997 by the Asian Financial Crisis.

It is not coincidental that recent commentaries have questioned the simplistic and exaggerated claims made by the advocates of Asian capitalism. The search for common values and institutions that characterised Chinese business embodies what Jamie Mackie describes as the 'essentialist fallacy'. 'Many of the popular notions about the influence of Chinese capital in the region', Terence Gomez and Michael Hsiao write, 'are fraught with misconceptions, mainly because there is a paucity of empirical evidence to substantiate many of these presumptions.' (2) Robert Cribb cautions us not to exaggerate the significance of Chinese business dominance in the Malay world. Most of Southeast Asia, he argues, was sparsely populated until the early twentieth century. The Malay world was the frontier par excellence for the Chinese, and given the material wealth of the region it is unremarkable that determined migrant entrepreneurs should have succeeded. Political conditions in the Malay world in the nineteenth century created opportunities which could best be exploited by a distinct immigrant group with well-developed networks. (3) The Chinese happened to be the most dominant among the immigrant communities and the most numerous, giving them a practical advantage over other smaller and scattered communities.

Cribb's analysis of the success of Chinese entrepreneurship in Southeast Asia, broadly speaking, divides their participation in the colonial economy into three distinct phases: autonomous political initiatives, revenue farms and crony business. (4) In the early years of colonial Malaya, dominated by the trading monopoly of the East India Company, European control was confined to the major trading centres whilst the countryside was left to the mercy of indigenous chiefs who were inevitably drawn into internecine conflict. In the centres, the Europeans relied on the kapitan Cina, an officially appointed representative of the Chinese community, to administer the local migrant communities. In the countryside kongsi--Chinese cooperatives formed on the basis of clan, dialect group or other affiliations to exploit the tin-rich western Malay states in the first half of the nineteenth century--were forced to organise themselves against the predations of the local Malay chiefs; this response included establishing their own armed forces. Those Chinese who played the dual roles of entrepreneur and political leader accumulated considerable wealth in the region.

The second phase was marked by the consolidation of colonial control and influence over territory. A major means of underwriting the expenses of colonial administration and financing economic development in Malaya in the 1800s was collecting taxes through revenue farms. Under this system, the right to collect taxes for the consumption of certain commodities was given to the highest bidders, who made their profits by collecting more revenue than was required to cover the costs of buying and running the farm. …

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