The research for this book was undertaken two years before the economic crisis of 1997-98 swept the Southeast Asian region. The companies studied in this book during and after that crisis provide ample evidence for the soundness of the author's conclusions.
Rajeswary Brown identifies family control, a relentless quest for finance and expansion for its own sake and a cavalier attitude towards risk as features that make the region's Chinese conglomerates inherently unstable. She argues that the rapid postwar economic growth in Southeast Asia that depended so heavily on these corporations was inherently unsound and vulnerable to the currency instability and collapse of asset values that occurred from September 1997.
The focus of the book is Indonesia, Malaysia, Singapore, Thailand and the Philippines. The chapters are organised thematically by industrial or commercial sector, so that diversified corporations such as Thailand's Charoen Pokphand group crop up in discussions of both the food processing and the telecommunications industries (textiles, land development and finance are also analysed). The quality and the quantity of Brown's empirical company data are impressive, and the book should find a place in teaching as well as research collections.
Historical path dependency is one of the book's recurring themes: Chinese corporations' close relationship with the state and their apparently reckless attitude to risk are both explained persuasively in terms of the historical role of Chinese business in the region, going back to the 17th century and beyond.
Brown also shows how a company such as Robert Kuok in Malaysia could parlay its role in food provision during the Japanese occupation into postwar success, despite its Chinese origins, in an overtly nationalistic political and business environment. There are similar examples from Indonesia. Brown explodes some myths about the harmonious Confucian family, pointing out that family control, besides hindering professionalised management and technological innovation, can often be a recipe for volatility, division and conflict. She also draws illuminating comparisons between Chinese family-dominated corporations and Italian ones, and between the "highly predatory and uncooperative" Chinese corporation and its Japanese counterpart, again with particular reference to weaknesses in technological innovation and learning.
Brown makes an effort to defend Chinese big business against the charge that it is merely "crony capitalism" dependent on state patronage, quite successfully in the case of the textile industry, but it must be said that overall her book is powerful evidence for the prosecution. Her main argument for the validity of her financial data is that these companies had no need to falsify their accounts, since lenders before 1997 were throwing capital, much of it in US dollars, at them with no regard for their real financial health, which was in any case concealed within a maze of family holding companies, and they could avoid most taxes with impunity.
As to whether they have changed their ways since 1997, Brown finds many signs of business as usual as the region's economy recovers, despite some restrictions on how these companies have historically operated and more overseas competition in some markets.
Jackie Sheehan is lecturer in 20th-century Chinese history, University of Nottingham.
Chinese Big Business and the Wealth of Asian Nations
Author - Rajeswary Ampalavnar Brown
ISBN - 0 333 75344 5
Publisher - Palgrave
Price - £50.00
Pages - 328