THE BAMBOO NETWORK: How Expatriate Chinese Entrepreneurs Are Creating a New Economic Superpower in Asia.

By Murray Weidenbaum and Samuel Hughes. Free Press. 264 pp. $24

Numbering roughly 40 million, the ethnic Chinese of Asia who live outside China—in Hong Kong, Taiwan, and Southeast Asia—produce some $600 billion in goods and services. This would be a respectable gross national product for a nation with that population. But the overseas Chinese are not a nation; they are a diverse diaspora. So their future role, both within the region and internationally, is bound to be complex. These ethnic Chinese are at ease neither in their countries of residence nor in China. To survive, they have adapted and yielded—like the proverbial bamboo, which "bends but does not break."

The authors of this study are specialists in business and economics: Weidenbaum (the first chairman of President Reagan’s Council of Economic Advisors) is professor of economics and director of the Center for the Study of American Business at Washington University in St. Louis; Hughes is a research fellow at the center. So, not surprisingly, most of their attention is devoted to the overseas Chinese as economic actors. Histories of some of the great Chinese fortunes are presented in excellent profiles, from Li Kashing’s Cheung Kong Group in Hong Kong to the Chia family’s Charoen Pokphand in Thailand. The authors show how each group has acquired certain traits in response to the overseas environment: complex corporate structures that ensure secrecy and conceal assets, family dominance and close informal bonds of trust with other Chinese, and careful adjustment to political realities. The last includes cooperation with powerful nonChinese—notably in Indonesia, where members of the military regularly front for Chinese entrepreneurs.

Now that mainland China is emerging as a field of economic activity, one might expect the overseas Chinese to have an easier time of it there. But, ironically, their adaptive skills are also needed in their "homeland." Most of the Asian states where they now live are far more advanced than China in constitutional government, rule of law, and sanctity of person (in China, extortions and kidnappings of overseas Chinese businessmen are not uncommon). In these respects, the environment of China is quite similar to that of the entrepreneurs’ adopted countries 30 years ago.

Yet, by the same token, the experience of the overseas Chinese gives them an advantage over other would-be entrepreneurs now entering China. The overseas Chinese provide more than three-quarters of all foreign direct investment, not to mention skills, technologies, and access to financial and marketing networks. Some believe that the eventual result of these relationships will be the knitting together of an economic and cultural "Greater China" out of China proper plus Hong Kong and Taiwan.

The question is whether such economic integration can occur unhindered by the deep political divisions that cut through the Chinese world. After all, since the Qing dynasty, the overseas Chinese have introduced political trouble into Chinese regimes as often as they have introduced know-how and wealth. Weidenbaum and Hughes touch on politics only in passing— and wisely so, because their book’s real strength lies in the competence and lack of sensationalism of its economically focused approach. But to their credit, the authors acknowledge that the emergence of "Greater China"—like that of industrial Europe in the 19th century—may as plausibly be accompanied by conflict as by peace and prosperity.