Reviewed by: Chinese Big Business and the Wealth of Asian Nations Paul Bolt (bio) Rajeswary Ampalavanar Brown . Chinese Big Business and the Wealth of Asian Nations. Houndmills, Basingstoke, Hampshire and New York: Palgrave, 2000. xii, 328 pp. Hardcover £55, ISBN 0-333-75344-5. In this work Rajeswary Ampalavanar Brown sets out to explain both the success of Southeast Asian economies and their collapse during the Asian economic crisis of 1997 by examining businesses owned by ethnic Chinese in Malaysia, Singapore, Thailand, Indonesia, and the Philippines. While recognizing that large Chinese conglomerates have contributed to Southeast Asia's economic growth, Brown is also very critical of ethnic Chinese firms, stating that "their institutional make-up bore the seeds of economic collapse" (p. 5). The reasons for this include the family control of conglomerates, recklessness in finance enabled in part by partnerships with multinationals and the state, the failure to invest in research and development, and fraud. [End Page 71] Brown's book is thick with data on various firms and sectors dominated by Southeast Asia's ethnic Chinese. The inclusion in Brown's title of "Wealth of Asian Nations" holds two ironies. First, Brown's analysis ends with the Asian economic crisis, a period when Asian wealth was falling precipitously. Second, the title reminds the reader of Adam Smith's classic work. However, Smith would certainly disapprove of the economic system Brown describes, which can best be labeled crony capitalism. Throughout Chinese Big Business several themes or arguments that are of interest to students of business organization or Asian affairs stand out. The first concerns methodology. For her own work Brown rejects the approach that focuses on trade policies and macroeconomic variables as being insufficient for understanding Asian business. She also rejects the perspective that attempts to explain ethnic Chinese business performance through Chinese culture, ethnicity, and networks. Instead, Brown takes a thematic approach, using case studies of Chinese firms in particular economic sectors and examining their structures, strategies, relationships, and performance. Brown argues that such an approach provides the broader context of Chinese business performance, especially specific linkages to foreign multinationals and the state, and thus generates insights that a macro or cultural approach cannot provide. For instance, based on her study of specific industries, particularly textiles, Brown concludes that the "flying geese" model of economic development is flawed (pp. 132-137). Japanese investments and industrial restructuring do not fully account for the growth of the Southeast Asian textile industry, as the flying-geese model might suggest. Instead, Southeast Asian states have experienced a diverse mixture of capital- and labor-intensive textile and garment manufacturing, rather than moving sequentially through stages of growth from labor-intensive to capital-intensive production. Similarly, ASEAN states did not move linearly from import substitution to export-oriented industrialization. Instead, local conditions and state policies played an important role in the development of the textile industry. These patterns, Brown argues, can only be understood through a specific study of the textile sector rather than by relying on macroeconomic data and abstract models. Brown devotes the second chapter to the "continued primacy of the family" (p. 17) in Chinese enterprises. Although the organization of business has changed over time and become more complicated (see the structure of the Hong Leong Group, Malaysia, pp. 22-23, and P. T. Astra International's organizational chart, pp. 54-55), ultimate control has usually remained in families. This has been achieved in part through creative financing as well as the very complexity of the organizational structures of the Chinese conglomerates. Brown's cases demonstrate that family control has at times resulted in unfortunate consequences. For example, bickering among Yeo family members contributed to the takeover of [End Page 72] Yeo Hiap Seng (Singapore) by Ng Teng Fong. Brown argues: "Family control and finance were at the heart of Chinese business impermanence," leading to recurring instability across Chinese enterprises (p. 282). In addition to family ties, Chinese firms have often been characterized as having close links with Southeast Asian states. Brown notes that the state has aided Chinese firms in numerous ways. For example, Soeharto's regime assisted Astra and provided it with a protected environment, as well as knowledge...