ANG KEDAITU ON WO FOCK N; çHUhiASTREET, ICat, (BLACKSMITH)H) NANYANG HUA CHI'AO To MALAYSIAN CHINESE: he Eme gence of A New hineseentity In alaysia ¡j NANYANG HUA GHI'AO To MALAYSIAN CHINESE: The Emergence of a New Chinese Identity in Malaysia Sau Foong Ng Honours Thesis, Department of Politics, University of Adelaide, South Australia, 1999 In the loving memory of my grandfather Dato Ng Kuok Thai CONTENTS Abstract i Acknowledgements ii Disclamer iii Introduction i. Research Methodology 3 ii. Chinese Identity Transition in Malaysia 5 Chapter I Emigration to Malaya: From Chinese to Overseas Chinese 15 i. The `Overseas Chinese' Model of Transition 26 Chapter II Political Struggle and the Formation of MCA 35 i. Formation of MCA 36 ii. From Independence to May 1969 38 Chapter III May13th1969 and the New Economic Policy 45 Chapter IV The Failure of the `Overseas Chinese' Model: Chinese Disunity 50 Chapter V The Adoption of the `Malaysian Chinese' Model: `Malaysian Chinese' 64 i.Tan Sri Lim Goh Tong 68 ii. Tan Sri Robert Kuok Hock Nien 73 iii. Quek Leng Chan 77 iv. Dato Lee Oi Hian 79 Conclusion 84 References 88 Interviews 88 Publications 88 Publications (Foreign Language) 92 Unpublished Papers & Dissertations 92 Journals 92 Other References 93 Pictures (Front Cover) 93 ABSTRACT It is argued that the success of Overseas Chinese in SoutheastAsia lies in their unique `Chineseness'. This unique`Chineseness', asmany argued created a chain of broad networks that linksChinese with Chinese together.Although the assumption may be true ina broad context, in Malaysia this assumptiondoes not hold. The sojourning Chinese duringthe period of the `Chinese Diaspora' came to Malaya in search of economic wealth. However the political situationin Malaya induced a change in identityto which `Overseas Chinese' identitywas accepted.In part,thisidentity gave theman edge over the indigenous population. Within a short periodof a few decades, the Chinesehad already dominated various economicsectors and controlled the middle class.As their economic base continued to expandafter independence, the Malayssoon came to realize that they were left witha fragmented society. As Chinese strive further, first economic and laterpolitics, the Malayssee the need to retard their expansion. The rapid expansionof Chinese economic base ledto a racial confrontation on May 13th 1969.The event became the turning pointand the New Economic Policy (NEP)was enacted to redistribute wealthamongst the Malays. As a result of politicalchange, the Chinesewere forced to adapt to a different situation by adoptinga new identity. In turn, thisnew identity as `Malaysian Chinese' becamethe determinant of theirsuccess in modern Malaysia. ACKNOWLEDGEMENTS First and foremost I would liketo thank my supervisor Dr Felix Patrikeef forhis exceptional guidance and advice. Withouthim I wouldn't have managed. I would also like to expressmy sincere gratitude to Associate Professor Dr Yen Ching - hwang, an expert in this fieldwho readily aided me in times of difficulty giving me greater insights into thesubject. Thanks must alsogo to Ng Yeong Hong, Managing Director of Ng KuokThai Holdings and Datin Sandra Lee, wife to Dato Lee Oi Hian forfacilitated me with resourceful information.To my buddy Greg, who would forgo his leisure time fora game of golf to help me, often providing critical and crucialadvice. To Wendy, my girlfriend whohelped me organize and proof read chapters ofmy thesis. although she would prefer to read `Cleo'. Also my cousin and Barrister-to -be Edwin who providedme with material and sources unavailable inAustralia. Finally I must thankmy parents who provided me with moralsupport and a determination to succeed. Without them I would not be here today. ii DISCLAIMER I hereby declare that this workcontains no material which has beenaccepted for a previous award of any other degreeor diploma in any other university and that, to my best knowledgeand belief, this these containsno material previously published or written by anotherperson except where due reference is made. Sau Foong Ng 1" November 1999 iii INITRODUCTIOI`I Driven out of their homeland by abjectpoverty and starvation, the Chinese emigrants who sailed for the shoresof Southeast Asiawere to become, in a generationor two, the region's economic backbone, and some of its richest men.1 In Southeast Asia, most of the literatureon Chinese business acknowledges the ubiquitous presence of this community inthe various economies, although withthe exception of Singapore, the Chinese onlyconstitute a minority of the population.2In part, Chinese business ubiquity created the justificationfor government attemptsto redistribute wealth in order to achieveeconomic parity amongst the populations.The question is, what gave the Chinesean edge over the indigenous population? Literatures exist which stereotype Chineseidentities in Southeast Asia, attributing their success to `broad networks', suffusedwith an inherent `Chineseness'.3As Brown argued: Ethnic Chinese succeed in business becauseof the extensive networks in which they work and its negative form the reason why the indigenous business people have been lesssuccessful is that they do not have these networks.4 He sees `Chineseness' as, The state of being Chinese to which all Chinese,overseas or in China itself, are heirs. For many observers, Confucianism isseen as the key to this unique Chineseness "' I Dobbs Higginson, M.S., "The Chinese Diaspora _Will They and Their Hosts KnowHow to Behave ?" In Asia Pacific: Its Role in the New World Disorder,(Victoria: Mandarin. 1993 ), p170; C. Brown, "Overseas Chinese Business" in South -East Asia, inSheridan. K. ed., Emerging Economic Svstenzsin Asia, (NSW: Allen & Unwin, 1998), pp209 -10 2 K. Yoshihara, The Rise of Ersatz Capitalism in SoutheastAsia, (Singapore: Oxford University Press, 1988); J.V. Jesudason, Ethniticity and the Economy:The State. Chinese Business, and the Multinational in Malaysia, (Singapore: Oxford UniversityPress. 1989): F. Hara, "Malaysia's New Economic Policy and the Chinese Business Community", The Developing Economics 29 (4). 1991; P.K. Heng, "The Chinese Business Elite of Malaysia", in R. Mcvey (ed.). Southeast Asian Capitalists, (Ithaca: Cornell South East Asian Studies Program,1992) 3 Yoshihara op. cit.; H. Sender, "Inside the OverseasChinese Network ". Institutional Investor. August 1991; J.A.C. Mackie, "Overseas Chinese Entrepreneurship", Asia Pacific Economic Literature. May 1992; Brown op. cit. 4 Brown op. cit. pp208 -9 2 It results in networks `linking ethnicChinese businesspeople together,networks based on common places of origin in Chinaor shared languages.' Such stereotypical assumptions can be shown to be severelylimited in the Malaysiancontext.While ` Chineseness', represented through `broadnetworks' did help create the foundationof an overseas Chinese identity in Malaysia, strictadherence to intra- ethnic Chinese networks became unworkableonce political pressure was applied.Thus, such assumptions are not a clear representationof Chinese identity in Malaysiain the modern era. The unique politicalstate in Malaya and later Malaysia helpedforge an identity transition amongst the Chinesecommunity from that of` Ovérseas Chinese' to that as `Malaysian Chinese'. The thesiswill provide an understandingof this evolution of Chinese identity in Malaysia.What became the catalyst for thetransition was political pressure, applied by agovernment which had the ability to doso. As Ien Ang observed: Why still identify ourselvesas `Overseas Chinese' at all? The answer depends on the context: sometimes it isand sometimes it is not useful to stress our Chinessness, however defined.In other words, the answer is political.6 Research Methodology This study employs a multi- disciplinary approach to trace the developmentof Chinese enterprises in Malaysia. Since the studyis an attempt to understand theentrepreneurial behaviour of the Chinese businessmenwith regard to their corporate strategiesbefore and after the NEP, it calls foran approach that requires the examination of widerange of variables. The study willstart by taking a historical approach showingsubstantial changes in the Malaysian society,so as the implications for Chinese capitalcan be 5ibid. pp209-10 3 better understood. I will focus on the interplay betweenChinese businessmenand the state, particularly with regard to changes in policy, inter ethniccooperation, and political influences from the government and most importantly the impactof ethnic politics on the business sector. The study will isolate factorsthat contribute to the determination ofcorporate strategy, business behaviourand the organizational structure of companies under Chineseownership. To provide a clear understanding of the peculiarities of Chinesebusiness development over the period of analysis,some insights will be providedon the development of the major Chinese companies. However, important activities undertakenby smaller companies particularly inter ethnic cooperationand politically connected incidences will also be examined in an attempt to create a more detailed pictureof the historical development of Chinese businessin Malaysia. I have selectedvarious businessmen, their corporations and particular events that highlight the dynamicsin Chinese business. The aim isto provide a better distinction in theirbusiness peculiarity, particularly on their adaptation to changes in the Malaysian politicalclimate. The businessmen included in the main profiles have beencategorised into two parts with two from the first