Ethnic Chinese business networks and the Asia-Pacific economic integration

Studies of Asian politics and economy have been mostly focused on states and formal institutions. The reality of Asian development, however, goes beyond national boundaries. Private, as well as informal actors are also increasingly important. The ethnic Chinese business network (ECBN) is an outstanding example of such development. This paper examines the Chinese network from a broad perspective of the Asian integration. It argues that ECBN is a major mode of economic integration in East Asia. It is built upon ethnic ties and it establishes strong business connections across national boundaries. As a type of informal integration, the ECBN is more effective than formal integrative institution since it can turn the great diversity of the region from a barrier to a major source of integration. Together with production networks and subregional economic zones, the ECBN promotes regional integration in the absence of a free trade arrangement. The powerful networks also explain why the Chinese economies performed better than other Asian economies during the Asian financial crisis. The Chinese networks will play a more important role in the new millennium and the study of those networks warrants special attention.