Chinese Business Networks Research Articles

Marketing via Shangbangs (Chinese business networks)

PurposeThis study examines how informal business networks achieve marketing goals in socially uncertain contexts. Drawing from multiple historical sources, Shangbangs, a type of business network that thrived in pre-1949 China, are analyzed.Design/methodology/approachThe Critical Historical Research Method (CHRM) undergirds a study of Shangbangs’ historicity (i.e. their socio-historically embedded multiplicity, including organizational forms, activities and connotations.FindingsAs informal regional, professional, project-based, special-product-based or mixed marketing networks, Shangbangs relied on “flexible specialization” and coupled multiple business needs to market goods and services, business organizations, specific social values and, when necessary, to debrand business rivals.Research limitations/implicationsThis analysis extends theories about marketing networks by probing their subtypes, diverse marketing activities, multipronged channels and relationship building with social entities (including underground societies, business associations and guilds) in response to pre-1949 China’s market uncertainties. Substantiating an alternative approach to “flexible specialization” and marketing innovations within the pre-1949 Chinese economy shows how a parallel theoretical framework can complement western-based marketing theories.Originality/valueThis first comprehensive analysis of Shangbangs, an innovative historical Chinese marketing network outside the conventional market-corporate dichotomy, can inform theory building for marketing strategy-making and management conditioned by social contexts.

Outsidership, network positions and cooperation among internationalizing SMEs: An industry evolutionary perspective

Immigrant entrepreneurship, like other market entries, continues to be examined in most studies as an event, and not as a process of ongoing interactions and exchanges that would adequately address the influence on such a transition of collaborative engagements and of industry evolution in the host market. Adopting an industry evolutionary perspective, we examine the facilitating role played by cooperative strategies among immigrant-run SMEs. Using a small number of valued customer and competitor relationships, we draw from case studies to show how both immigrant and native run SMEs gain knowledge and resources through collaborative engagements to extend into new customer segments. These relationships enable them to mitigate their outsidership by adopting positions on the edges of networks that allow them to avoid competing directly against other internationalizing SMEs abroad or in their home markets. Using context to build an industry evolutionary perspective, we observe their entry into collaborative engagements with intermediaries in other business networks to build additional industry segments in the less understood maturing industry phase. This study shows how native-run Italian internationalizing SMEs accessed the resources of immigrant Chinese business networks and developed capabilities for mutual benefit.

Reversing the Bamboo Network: Chinese capital, geopolitics, and institutions in Southeast Asia

ABSTRACT This study applies a comparative political economy approach to institutional theory by considering institutional convergence and geopolitics as determinants of Chinese outward foreign direct investment (OFDI). Using country-level data for a sample of Asian countries, including Bamboo Network countries or countries with prominent overseas Chinese business networks in Southeast Asia, and other countries identified in the Varieties of Capitalism literature, the dynamic panel analysis from 2007 to 2019 finds that Chinese OFDI is significantly positively affected by the interaction between greater formal institutional distance from China and a similar state-backed institutional configuration. Conversely, active territorial disputes with China and formal arbitral proceedings against this country have significant and negative effects. This study finds that Chinese OFDI in general and specifically the reversal of the Bamboo Network, or the flowing back of Chinese capital into Southeast Asian economies that initially invested in China’s rise and integration into the global economy, are conditioned upon geopolitical tensions and convergence in terms of institutional configuration but not institutional distance.

A typology of agricultural production systems: Capability building trajectories of three Asian economies

Analysing the agricultural sectors of Taiwan, Malaysia and Singapore, this paper examines the capability‐building process that encourages productivity and innovation. It describes and explains the origins and subsequent evolution of three forms of agricultural production system, each generating different farming capabilities and distinct forms of competitive advantages. The paper argues that Taiwan's rice‐oriented agricultural production system stimulates both productivity and innovation, helping Taiwanese farmers raise their income level and living standards. The active deployment of state institutions and a malleable labour force, evidenced in the Malaysian palm oil industry, is effective in raising farming productivity but not the ability to innovate. Singapore's aquaculture‐oriented agricultural production system is somewhat useful in stimulating productivity and innovation. Yet the city‐state's inherent lack of space and open international trade regime have circumscribed the potential of its aquaculture industry. It now relies on the regional ethnic Chinese business networks to expand the aquaculture industry's knowledge base and its industrial commons. The principles discussed in this paper provide policy lessons, or at least some initial guidance, for other developing economies aspiring to modernise their agricultural sector.

Sino-Foreign Business Networks: Foreign and Chinese banks in the Chinese banking sector, 1890–1911

AbstractAt the turn of the twentieth century, foreign bankers viewed China as one of the up-and-coming markets for international banking. This led to a rapid influx of foreign banks into the banking sector of the China coast. Consequently, foreign banks became a major presence in the treaty ports, where they financed China's foreign trade, provided loans to the Chinese government, and supplied Chinese banks with credit. However, their operations in the Chinese banking sector were always dependent on interaction with Chinese banks. Previous scholarship has largely portrayed the relationship between foreign and Chinese banks in terms of the former dominating and controlling the banking sector of China's treaty ports. This article challenges this view and shows that the relationship between foreign and Chinese banks was one of interdependence rather than one-sided control. It demonstrates how foreign banks had to adapt their business practices to the Chinese business environment and how they were integrated into existing Chinese business networks. Moreover, this article reveals how Chinese entrepreneurs could use their relationship with foreign banks for the benefit of their own business networks and exploit information asymmetries between foreign and Chinese banks to generate profits. The result of the development of this interdependent relationship between foreign and Chinese banks, and of the integration of the former into existing Chinese business networks was the formation of Sino-foreign business networks, which played an important role in making possible the operations of financial markets in China's transnational treaty port economy.

Collaboration and opportunism as a duality within social capital: a regional ethnic Chinese case study

Ethnic networks constitute a form of social capital and are central to the success of many ethnic Chinese entrepreneurs in Southeast Asia. The paper elucidates how such ethnic networks come to be formed and how they may create value through entrepreneurship. The findings suggest that ethnic networks can be an enabler of business cooperation but have problems stemming from an essentially dual nature that balances the benefits of such cooperation against tensions from self-interest, opportunism and covert dealings. These rarely described opportunistic characteristics are derived from the distinct historical background of ethnic Chinese business in Southeast Asia. The paper advances the existing concept of ethnic Chinese business networking by showing empirically, the workings of a case of the normally intricate phenomena. Three propositions for theory are also developed that highlight implications of the opportunism, and the rules of the game in which human capital is being used.

Firm entry modes and Chinese business networks: Malaysian investments in Vietnam

This paper examines the Malaysian Chinese firms that have expanded into Vietnam. Based on research and qualitative personal interviews with Malaysian Chinese firms that have invested in Vietnam, the paper unpacks the entry modes that these firms have undertaken. It argues that the Malaysian Chinese firms prefer joint ventures in their Vietnamese businesses to wholly‐owned subsidiaries and personal direct investments. This paper also argues that such investments are often embedded in social and intraethnic ties, which connect Malaysian Chinese firms with Vietnam's ethnic Chinese businessmen. To this end, these firms tend to rely on informal ties and nonmarket institutions in the form of the ethnic Chinese business networks. Nevertheless, the Malaysian Chinese firms are not averse to collaborating with nonethnic Chinese firms that enjoy a good relationship with the Vietnamese state. This observation is especially marked in the property and construction, and finance sectors.

Introduction

This special issue contains a selection of articles, produced from papers presented at a workshop under the title Border Societies, Chinese descendants in East Asia under Japanese colonialism, 1895–1945, convened in Macao on 25 June 2013. Its purpose is to contribute to the writing of a global history of East Asia, as a counterpoise to the contestations over historical issues, which at present dominate the public debate in the region and keep the involved nations divided. To achieve this purpose, the historical exploration of controversial themes is required such as the existence and uses of multiple identities, the apparent dividedness of state institutions, and the possibility of ambiguous loyalties among citizens when these have vital interests in more than one national state. The Chinese cross-border business networks and the migrations of people in the region provide the vantage point for such a study in this issue. It tackles on questions as, how did commodities, people, capital and ideas flow transnationally during the Japanese occupation period, and how did these flows become embedded in the local societies? They thoroughly transformed the relationships among the nations involved, and contributed to the region’s rise in the modern world. (This article is in English.)

Neither collectivism nor individualism: Trust in the Chinese guanxi circle

This paper illustrates the phenomenon of the social circle in Chinese culture, including the type and role of trust in such a circle, which we call a guanxi circle. In general, a guanxi circle is an ego-centric network. The Chinese national culture is generally thought of as a culture of collectivism, which in turn makes the Chinese network structure dense and closed in organisational settings. However, we find that there are also aspects of openness and flexibility in both Chinese business and social networks, as guanxi circles. In addition, the guanxi circle has a unique structure with ‘differential modes of association’. Finally, the boundary of a guanxi circle is not closed, and outsiders may be included in this circle. That makes the Chinese network structure flexible to opening or closing. This flexibility may be rooted in the Chinese guanxi operation, and trust plays the key role in the operation of guanxi circles. In particular, different levels of association in the circle require different types of trust.

Following the Grain: State Formation and Trans-local Grain-trading Networks in the Philippines

With respect to the major approaches of state-society relations and Chinese business networks in Southeast Asia, two knowledge gaps are identified. First, little is known about how two sets of dualistic conceptual entities may be connected in the often-contentious state formation process between: (1) the ruling minority and ruled majority; and (2) the nationalising state and grain-producing frontiers. Second, very little is known about the role that the Chinese business networks played and how they contributed to the state formation processes. Using a Philippine trans-local grain-trading network as a site of investigation, the paper seeks to fill these knowledge gaps by delineating an integrative approach – designated as rhizomatic political economy – which argues that Southeast Asian state formation may hinge on the instrumentalisation of Chinese business networks and what is identified as their rhizomatic power/knowledge system. They are not just business-brokers in the trans-local grain trade that connects the national capital and grain-producing locales, but also serve as political brokers to implement state measures in regards to food and interior security affairs.

Cultural identities of Chinese business: networks of the shark-fin business in Hong Kong

From a global standard, shark-fin consumption certainly violates international norms on bio-diversity and endangers the existence of the shark species. Furthermore, the commercial shark-fin industry generates additional adverse environmental impacts. Nevertheless, shark-fin consumption has served an important role in the cultural aspect of Chinese ‘foodway’. More importantly, the business relations and networks behind this industry have never been comprehensively studied. In so doing, this paper employs first hand interviews with the traders and processors, as well as official statistics from the government of Hong Kong, to come up with one of the most comprehensive and in-depth pieces of research on the business relations and the cultural aspects of shark-fin business in Hong Kong. In addition, we will explore the theoretical as well as the cultural dimensions of shark-fin business in trying to question the meaning of Chinese business networks. One of the key findings of this piece of research is that the collective activities of shark-fin consumption, business relations and networks are embedded along the historically, socially and culturally constructed Chinese identity. The implication is that such orchestration between culture and business can have far-reaching consequences to other Chinese businesses.

Business networks, “brain circulation”, and the American Chinese diaspora

Purpose – Overseas Chinese business networks have had a profound effect on the economic development of mainland China and on the global economy as a whole. Such networks are based predominantly on familial, language and cultural factors and provide a foundation on which business is conducted, often with reduced transaction costs and with resilience to major shifts in the financial markets. This paper aims to explore business networks in the US Chinese diaspora.Design/methodology/approach – The paper begins with a brief introduction to the concept of ethnic business networks. Subsequent sections provide historical background on the Chinese diaspora and the role Chinese business networks have played around the world. An examination of how such networks have evolved in the US context follows. Finally, implications are discussed and a research agenda is suggested.Findings – It is suggested that a different type of business networking pattern has evolved in the US context, one that is less reliant on the tradi...

Chinese style business networking and its influence on future supply chain – the case of ASUSTeK

The rapid growth of Mainland China has shaken the business networks over the world. Not only Mainland China, but also Hong Kong, Taiwan, Singapore, Malaysia and Vietnam have showed the world 'the Chinese business style'. This paper takes Taiwan's enterprise network of ASUSTeK as an example of Chinese business style networking, which stands as an example of IT industry. Through the introduction of this case study, we can get a general picture of the Chinese style business network system, and the operation and management of ASUSTeK, which recently is putting more efforts into developing a green supply chain.

Survival of the fittest? Kenya's jua kali and Chinese businesses

China's engagement with African countries is growing rapidly, spanning trade, aid and investment. While speculation remains over the opportunities and challenges China brings to the continent, some observers have suggested that capital inflows from the Chinese may foster sustainable economic development in the region. The majority of such claims, however, remain rooted in assessments of “globalization from above,” with little regard for the rapid rise of Chinese small and medium enterprises (SMEs) among many of Africa's informal economies. Drawing on case study data from Kenya, this paper argues that rather than large scale investment and aid projects, it is this proliferation of Chinese entrepreneurship that carries the greatest ramifications for Africa's economic development, with mixed results. The analysis first explores the social and economic organization of overseas Chinese enterprises, and the centrality of Kenya's informal sector – the jua kali – for the country's economy. It proceeds to examine China's engagements with Kenya, both in terms of trade and investment, and the emergence of Chinese SMEs in the informal sector. The article argues that the distinct nature of Chinese business networks endows them with significant competitive advantages over their Kenyan counterparts. Unlike the structural integrity maintained by Chinese networks, ethnic cleavages preclude effective coordination among Kenyan SMEs, in turn rendering them unable to parry market competition brought by the Chinese. The general picture is thus one of Kenyan entrepreneurs struggling to sustain both their enterprises and livelihoods. Such factors have thus far failed to enter studies on the implications of “China-in-Africa.” Yet it is precisely the rise of Chinese SMEs in Kenya and elsewhere that presents the most significant challenges for economic development in the region.

Speed Intensity and the Rise of the Chinese Economies

Producers of speed‐intensive goods, e.g. clothing or electronics, face markets that are in constant flux due to changing fashion or technology. Throughout the twentieth century, Chinese business networks have had a comparative advantage in producing speed‐intensive goods due to their quick reaction time. This comparative advantage was of relatively little value prior to the Second World War, but since the war, international telephone and air services have made international trade in speed‐intensive goods practical. This has caused the demand for speed‐intensive goods on the international market to grow at an extremely rapid pace. This growth in demand can explain the post‐Second World War economic booms experienced by Hong Kong, Taiwan and finally China.

Getting Rich and Staying Connected: the organizational medium of Chinese capitalists

This article answers the following question: ‘What is the organizational medium that has allowed a few Chinese businesspeople in East and Southeast Asia to accumulate considerable wealth and economic power?’ In the course of giving an answer, we show the organizational differences between traditional business networks in the late Qing and early Republican periods and the Chinese business networks in modern capitalist Asia. We argue that, throughout the twentieth century, Chinese business people outside of China proper began to adapt Western corporate structures for their own purposes and that this organizational innovation allowed Chinese to develop and sustain personal networks through which wealth and power could be concentrated.

What is Chinese about Chinese Businesses? Locating the ‘rise of China’ in global production networks

There is an implicit but commonly held assumption that Chinese businesses are distinctively Chinese. Casting them in unitary and national terms, this assumption has often provided the underpinnings for the conception of the strength of Chinese businesses as signs of an emerging China threat. Drawing on a global production networks (GPN) approach, this paper aims to question the assumption by arguing that many Chinese businesses, embedded in the expanding global and regional production networks, have taken on important transnational characteristics. Given these transnational connections, Chinese business networks in both ‘Greater China’ and China proper are characterized more by diversity and fragmentation than by cultural coherence and homogeneity. This analysis of the transnationalization and fragmentation of contemporary Chinese businesses helps better understand and respond to the complex challenge posed by the economic dynamism in China.

China’s business network structure during institutional transitions

This study adopted a structural approach to examine the formation and characteristics of Chinese business networks via interlocking directorates during a stage in China’s institutional transitions. Analyses of the network structures of 949 listed companies revealed that: (1) Chinese business networks were smaller in scale and lower in density than their Western counterparts; (2) no nationwide network with a dominant center existed; (3) interlock occurred mainly in the form of smaller business groups which tended to be regionally fragmented; (4) ties were more prevalent among industrial peers than with financial institutions; and (5) government ownership was predominant. These findings therefore deepen our understanding about the pattern and extent of business interlock in China. Not only do these findings provide substantive implications to the notion and dimensionality of guanxi, but they also offer inspiration to managers and policy makers by illuminating key characteristics of network structure. Laying these foundations shall pave the way for future research in the structure of Chinese business networks.

Confucian value system and its impact on joint venture formation

Prior research suggests that in international joint ventures (IJVs) between firms from diverse cultures, partner related factors are of importance for the successful management of the joint venture. This paper reports the study of IJVs formed by Singapore firms in People's Republic of China and India. Since Singapore and China share a common Confucian culture, it was expected that a Singapore firm's approach to joint venture formation in India will differ significantly from its approach to joint ventures in China. The results, however, suggest that the partner selection process follows a different logic in Confucian societies, and Singapore firms were as successful in forming IJVs in India as in China. The paper further explores the influence of Confucian ethics and values on the formation of Chinese business networks. Findings also suggest that Singapore firms have bought into the Confucian value system, and the argument that partner commitment and trustworthiness are critical to long-term, harmonious and successful joint ventures.

New Entrepreneurs in Australia: Young Overseas Chinese Business Networks

New Entrepreneurs in Australia: Young Overseas Chinese Business Networks