Bamboo network

This article is about the business model. For the Cold War usage, see Bamboo Curtain.

Bamboo network
Map of the bamboo network
Legend	Bamboo network   Greater China region
Countries and territories	Singapore Malaysia Indonesia Philippines Thailand Vietnam
Languages and language families	Chinese, Malaysian, Indonesian, Thai, Vietnamese, and many others
Major cities	Singapore Kuala Lumpur Bangkok Jakarta Manila Ho Chi Minh City

The term "bamboo network", or the Chinese Commonwealth, is used to conceptualize connections between certain businesses operated by overseas Chinese in Southeast Asia. It links the overseas Chinese community of Southeast Asia (Malaysia, Indonesia, Thailand, Vietnam, the Philippines, and Singapore) with the economies of Greater China (mainland China, Hong Kong, Macau, and Taiwan). Overseas Chinese companies have a prominent role in the private sector of Southeast Asia, and are usually managed as family businesses with a centralized bureaucracy.

Structure

Chinese businesses in Southeast Asia are usually family owned and managed through a centralized bureaucracy. These firms are typically mid-sized corporations, rather than large conglomerates like those dominant in Japan. Trade and financing is guided by family ties and personal relationships are prioritized over formal relationships. This promotes commercial communication and a faster transfer of capital in a region where financial regulation and rule of law remain undeveloped. These relationships are based on the concept of guanxi, the Chinese term for the cultivation of personal relationships.

Much of the business activity of the bamboo network is centered in the major cities of the region, such as Jakarta, Singapore, Bangkok, Kuala Lumpur, Ho Chi Minh City, and Manila.

History

The origins of the bamboo network can be traced to the 16th century, when Chinese migrants from southern China settled in Indonesia, Thailand, and other Southeast Asian countries. They founded at least one well-documented republic as a tributary state of Qing China — the Lanfang Republic that lasted from 1777 to 1884. Chinese populations in the region saw a rapid increase following the Communist victory in the Chinese Civil War in 1949, which forced many refugees to emigrate outside of China. The bamboo network has been heavily influenced by Confucianism, a philosophy developed by Confucius in the 5th century BC that promotes filial piety and pragmatism.

1997 Asian financial crisis

Governments affected by the 1997 Asian financial crisis introduced laws regulating insider trading, weakening the influence of the bamboo network. After the crisis, business relationships were more frequently based on contracts, rather than the trust and family ties of the traditional bamboo network.

21st century

Following the Chinese economic reforms initiated by Deng Xiaoping during the 1980s, businesses owned by the Chinese diaspora began to develop ties with companies based in mainland China. Bamboo network businesses invested heavily in China, influenced by existing cultural and language affinities. China's transformation into a global economic power in the 21st century has led to a reversal in this relationship. Seeking to reduce its reliance on United States Treasury securities, the Chinese government shifted its focus to foreign investments. Protectionism in the United States has made it difficult for Chinese companies to acquire American assets, strengthening the role of the bamboo network as one of the major recipients of Chinese investments.

See also

• Association of Southeast Asian Nations (ASEAN)