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SIRI KERTAS KERJA WORKING PAPER SERIES ICS Working Paper No. 2008-16 Communal Economic Movement of Chinese Overseas: A Malaysian Case Emile Kok-Kheng Yeoh Institute of China Studies University of Malaya 50603 Kuala Lumpur, MALAYSIA http://ics.um.edu.my/ Institut Pengajian China

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SIRI KERTAS KERJA

WORKING PAPER SERIES

ICS Working Paper No. 2008-16

Communal Economic Movement of Chinese Overseas:

A Malaysian Case

Emile Kok-Kheng Yeoh

Institute of China Studies University of Malaya

50603 Kuala Lumpur, MALAYSIA

http://ics.um.edu.my/

Institut Pengajian China

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ICS Working Paper No. 2008-16

Communal Economic Movement of Chinese Overseas:

A Malaysian Case

Emile Kok-Kheng Yeoh

Email: [email protected]

August 2008

All Working Papers are preliminary materials circulated to promote discussion and comment. References in publications to Working Papers should be cleared with the author(s) to protect the tentative nature of these papers.

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Communal Economic Movement of Chinese Overseas: A Malaysian Case

Emile Kok-Kheng Yeoh *

Introduction: Corporatization as Ethnogenesis

If the year 2007 were to be noted as the tenth anniversary of the East Asian Financial Crisis that wrecked unprecedented havoc with Malaysian economy and politics, not as many people will note that it is also the tenth anniversary of an event that plunged the impoverished East European state of Albania into total anarchy after the collapse of a series of fraudulent pyramid schemes caused a large portion of the populace to lose their life savings. Fewer people will remember the basic facts of the crisis. Thousands of Albanians deposited their meager savings and money from relatives working abroad into the nine charitable foundations run by emerging Albanian businessmen, some of them having very close links with government officials. These foundations – some of the largest ones, in fact, looked like holding companies – eventually collected deposits totaled a billion US dollars, or one third of Albania’s gross domestic product, when the schemes collapsed en masse with as many as 700,000 Albanians in a population of merely 3.2 million losing their savings, plunging the country into political anarchy and a looming civil war.

Likewise, not many people will note that the year 2006 is the twentieth anniversary of an episode closer home that bears much similarity in various aspects to the Albanian pyramid affair – the DTC fiasco of 1986 that was unprecedented in Malaysia, in which more than half a million mostly working-class Chinese – perhaps one in three Chinese households – lost their money, and in some cases, their entire life savings. The Malaysian government was forced to introduce the Essential (Protection of Depositors) Regulation, 1986, under the Emergency (Essential Power) Act, 1979, to give Bank Negara the necessary authority to act upon the deviating DTCs, and to come up with feasible rescue plans to help the depositors and to defuse a potentially explosive political storm in the unique ethnic democracy of Malaysia.

The upheaval, while sending shock waves across the nation, had its impact most acutely felt in the country’s Chinese community. The Multi-Purpose’s misadventure and the DTC fiasco, by close scrutiny, were the direct results of the community’s haste to modernize its economic structure, as a response to the government’s New Economic Policy promulgated in 1970, that ushered in a new era of ethnic democracy 1 . The “corporatization movement” – that saw communal capital mobilization as a vehicle for reethnicization or ethno-(re)genesis2 – had aimed at pooling the community’s hitherto scattered resources, much of which tied up idly in the 4,000 or so traditional associations and guilds3, to set up large investment and holding companies, or establish multi-purpose cooperative societies, or both. The Corporatization Movement

For an analysis of the Malaysian Chinese “economic self-strengthening movement” and the 1986 cooperative fiasco, one inevitably has to go back to the rise of the Koperatif Serbaguna Malaysia (KSM) 4 and the success of the Multi-Purpose Holdings Berhad (MPHB) 5 that led to the Chinese community’s acceptance of the concept of “pooling scattered funds for corporatization”. This “corporatization movement” (daqiye yundonng 大企业运动), or literally the "big enterprise

* Dr Emile Kok-Kheng Yeoh, Director and Associate Professor, Institute of China Studies, University of Malaya, Malaysia. Email: [email protected]

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movement", reflected the Chinese community’s realization of the fundamental weaknesses underlying traditional Chinese business management. For all its reputed strength and success, the Chinese business culture has never been able to produce anything like the famed financial conglomerates of Japan (zaibatsu) and South Korea (chaebol) - both incidentally are etymologically Chinese (caifa 财阀 ).

The germination of the corporatization movement must of course be traced back to the establishment of KSM and MPHB in August 1968 and May 1977 respectively. At the time when KSM began to manifest its success and prosperity, everywhere throughout the Chinese community cooperatives and holding and investment companies sprang into life. The call for corporatization echoed across the community. Much has been written over the years about KSM and MPHB. This paper will, instead, focus upon the investment companies and cooperatives set up during that period by the traditional Chinese associations6 and trade guilds.

Among the cooperatives set up or run by Chinese clan-regionalect7 associations were Komewah (by the Kheng Chew Association), Kojasa (Hokkien), Sepadu (Hakka), etc. There were also trade association-initiated cooperatives like Sakapp (Hawkers and petty traders), Koteksi (taxi trade), and the alumni association-run Wartawan8 (Chung Ling Alumni), and many others. Many of these cooperatives were among the 24 ill-fated DTCs hit by the 1986 crisis. To understand this unusual phenomenon one needs to go back to the Malaysian Chinese “economic self-strengthening movement” or “corporatization movement” that started it all.

The need for modernization of the Chinese economic structure was indeed pressing. The structural limitation existed since the beginning of the Chinese economy in British Malaya. The omnipresence of the Chinese in Southeast Asia is a rather unique phenomenon. At the time of each country in the region gaining independence, there always existed an immigrant Chinese population within, who were numerically sizeable and economically vibrant. The Chinese in Southeast Asia mostly migrated from the overcrowded southeastern Chinese coastal provinces of Fujian and Guangdong. Some historians metaphorically described the historical eastward and southward movement of the Chinese from the northwest corner of the present China as an open folding fan: waves and waves of migrants pouring down from the handle of the fan, along the Huang He (Yellow River), surging over the surface of the fan and settling down in time immemorial, with the population denser in the south and along the coast and overcrowded in the lowest southeastern corner – Fujian and Guangdong – “from which drops of water spilled over into the seas and fell down on the islands and peninsulas of the South China Sea beyond Vietnam.” (Ly, 1978:4) This southward migration of the Chinese in the modern era was by no means unique in terms of humankind’s natural demographic movement, being preceded in Southeast Asia in prehistorical time by Malayo-Polynesians and Austronesians whose origin anthropological studies have traced back also to the continent of China. From the southeastern bank of the Chang Jiang (Yangzi River) came the ancestors of the modern Vietnamese, and from where the present Yunnan province is, those of the modern Thais and Laotians. Migration during Colonial Period

The large-scale demographic movement of the Chinese into Southeast Asia is, nevertheless, a modern phenomenon. Brought in by the European colonial powers and toiling under the most abominable conditions, suffering persecution, diseases and violent deaths, their contribution to giving the lands they resided a sound modern foundation for further development is difficult to deny. Unlike the European colonial expansion, this Chinese demographic movement, being solely economically motivated, did not result in the domination over the descendants of the earlier inhabitants. Interethnic marriage and acculturation had been common for the Chinese community in many Southeast Asia countries.9

The “push” factors in the Chinese migration overseas were numerous but topping the list were the calamities that befell China since the mid-nineteenth century. Defeat in the hands of the foreigners, the (Christian) Taiping insurrection, the Muslim revolt, the Nian 10 uprising, the republican revolution, the Japanese invasion, the civil wars, drought, flood and famine all but left millions dead and lands devastated. Waves and waves of hungry peasants, poor workers,

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frustrated merchants and intellectuals were pushed by desperation overseas to look for greener pastures.11

At around that same time, in Southeast Asia, the new European colonies were short of many essential features for a viable economy – the traders (beneath the official traders), artisans, craftmen, skilled workmen; in short, work of the kind with which the few proud Europeans would not demean themselves to undertake. Hence, the Chinese were welcome to provide these basic needs, as bricklayers, masons, carpenters and restaurant-keepers, etc. The labour flow often took the form of kidnapping. Tens of thousands of Chinese peasants were kidnapped by gangsters to be sold to coolie-brokers at harbours or robbed to destitution and then forced to sign voluntarily the “coolie contracts”.12 Social Structure of Early Malayan Chinese Community

The reasons for the Chinese migration had been scholarly investigated by Chen Da (1934) and Huang Zhilian (1971), the latter in two Nanyang University surveys conducted in 1970 (Figure 1). The findings of Chen Da and the Nanyang University surveys show that the most important factor of the Chinese diaspora was economic difficulties. Furthermore, the second factor in Chen Da’s findings can be rightly incorporated into the first factor since kinship or friendship ties in Nanyang 南洋 (a Chinese term – though rather passé today – for Southeast Asia) might have been a motivation for those who were destitute in China to emigrate. Contradictory to the myth of the Southeast Asian Chinese as exploiters from overseas, the majority of the Chinese migrants to Nanyang had been in the state of unemployment or disguised unemployment, mostly as a result of illiteracy and landlessness (Huang, 1971, 1972). Figure 1 Major Factors of Chinese Migration to Nanyang (a)

Chen Da’s Findings

(Total number of families = 905) E – Economic oppression T – Ties and Relationships in Southeast Asia N – Natural Calamities H – Hope for career development M – Misdemeanour C – Chaotic situation F – Family disputes O – Others

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(b)

Sources: Chen (1938:48); reports of the surveys conducted in 1970 by the History Department of the Nanyang University, Singapore: “Xinjiabo Huazu Cunshi Diaocha Yanjiu” (A Survey Analysis of the History of Chinese Villages in Singapore) and “Xinjiabo Huazu Hangyeshi Diaocha Yanjiu” (A Survey Analysis of the History of Chinese Occupations in Singapore), see Huang (1971).

Today, the Malaysian Chinese are employed in nearly all known occupations in the country. It is difficult to imagine now that in the early period of the last century, in contrast with the Chinese societies in the other Southeast Asian countries (or would-be countries), it was a peculiar characteristic of the Malayan Chinese society that it consisted of particularly large working and peasant classes. In a way, the local Chinese societal structure was rather incomplete, and as shown in Figure 2, workers and peasants constituted about 70 per cent of the Malayan Chinese population in 1911. More than 80 per cent of the Chinese population then had grown up in China and had no wish to permanently stay in this alien land.

It was only until after the World War I that the Malayan Chinese society attained a more complete structural composition. Due to the gradual mechanization of the tin mining industry and the ascendancy of the rubber industry that provided the largest job opportunities, the number of miners rapidly decreased from 41 per cent in 1911 (FMS figure) to 10 per cent in 1931 and further to 2 per cent by 1967. On the contrary, agricultural labourers rose from 11 per cent in 1911 (FMS) to 41 per cent by 1931.

According to the findings of Huang (1971), nearly all of the Chinese immigrants (more than 90 per cent) were first engaged in occupations in the category of manual labour (see Figure 3). “Shop workers”, “hawkers”, “businessmen” and “others” that were outside the category merely totalled to a very small proportion (18.14 per cent), while “businessmen” alone constituted only 2.4 per cent.

The Japanese sinologist, Yunaka In, had also analysed the class structure of the early Malayan Chinese society based on the 1931 population census. Figure 4 shows that the “big compradore capitalists” class constituted only 0.3 per cent of the total population of Malaya and 0.6 per cent of that in Singapore, while the “nationalist compradore capitalists” class constituted 1.2 per cent of the population of Malaya and 1 per cent of that in Singapore. Thus, the intermediary compradore group was merely 2 per cent of the total Malayan Chinese population.

Nanyang University’s Findings

(Total number of families = 347) E – Economic difficulties P – Political chaos S – Social disturbances K – Kinship ties F – Family disputes M – Misdemeanour O – Others

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Figure 2 Occupational Distribution of the Chinese in FMS, 1911 (Total = 360,000)

Source: Data from Snodgrass (1980:38).

Figure 3 Chinese Immigrants’ First Job after Arriving in Malaya (Total = 209)

Source: Reports of the surveys conducted in 1970 by the History Department of the Nanyang University 南洋大学, Singapore: “Xinjiabo Huazu Cunshi Diaocha Yanjiu 新加坡华族村史调查研究 [A Survey Analysis of the History of Chinese Villages in Singapore]” and “Xinjiabo Huazu Hangyeshi Diaocha Yanjiu 新加坡华族行业史调查研究 [A Survey Analysis of the History of Chinese Occupations in Singapore]”, see Huang, 1971).

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Figure 4 Class Structure of the Malayan Chinese Society, 1931 a) percentage in total Malayan Chinese Population (total number = 1709392)

b) percentage in total Malayan Chinese Employment (total number = 940870)

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c) percentage (total number = 940888)

Source: Data from Yunaka (1969: 294-295), see Huang (1971:72-73).

The social structure in 1947 as shown in Figure 5 was not much different from that in 1931, with the intermediary compradors (capitalists) still constituting only a very small proportion of the total population, while labourers and peasants (proletariats) still formed the major classes. Figure 5 Class Structure of the Malayan Chinese Society, 1947

(percentage; total number = 947273)

Source: Data from Yunaka (1969: 295), see Huang (1971: 73).

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Structural Limitation of Malaysian Chinese Economy

From the discussion above, it is obvious that structural limitation has thus existed since the beginning of the Chinese economy in British Malaya. Even among the smaller proportion that engaged in commercial activities, the intermediary (middleman) type of their activities had given the economic system of the Malaysian Chinese certain important characteristics.

From the point of production and marketing, it was forced to depend upon international capitalist, and thus remained passive, restrained and unstable. The small initial capital had resulted in slow progress, if any, despite the effort a businessman might have put in for years. This limited potential was related to the low capability of capital generation and accumulation that was attributed in turn to the limitation in profitability. Hence, capital available for reinvestment was highly limited and the potential for further development was much restrained. Inevitably, this would adversely affect the potential evolvement of the semi-feudal, semi-capitalist communal economic system into full-fledged capitalism.

Another obstacle on the road to capitalism lied in the very nature of its intermediary (middleman) characteristic, which was, strictly speaking, neither a primary (extracting/growing) nor secondary (processing/manufacturing) mode of production. Being tertiary (distributing) in nature, it employed no sophisticated instruments in production, thus rendering inapplicable the cultivation of the spirit of research and innovation. The lack of knowledge on the use and making of scientific instruments and skills was also attributable to the poor and primitive peasant background of the immigrants.

Furthermore, the intermediary commercial activities were also closely related to the clan/communal orientation. In terms of management, up to the 1970s, the Malaysian Chinese economic structure was intertwined very much with real or assumed ancestral relationship and the loyalty of ancestral origin. In employment, employers placed much emphasis on kinship and the link of common village/district of origin. Paternalism prevailed and unconditional loyalty on the part of the employees was called for. All these were not constructive for the evolution into modern capitalism that emphasizes meritocracy and a contractual employer-employee relationship instead of the Chinese-style nepotism13 and paternalism.

In addition, though there were very rich Chinese families with substantial ownership in rubber estates, manufacturing industries, construction and transport industries, the economic activities involved were mainly family-run businesses. They were inefficient and less profitable in comparison with modern enterprises using modern commercial practices. Nevertheless, today these family-run businesses still survive as the prevailing type of business practice in the retail trade, especially in the villages and small towns.

Another peculiarity of the Malaysian Chinese economic structure was the tendency for monopoly of particular trades by certain regionalect or district-clan groups although this has gradually been in decline in the modern era. Such a tendency could be attributed to the self-centred (“assist-only-thy-fellowmen”) or ethnocentric attitude of the regionalect/clan groups such as the Hokkien (Fujian), Cantonese (Guangdong), Hakka (Kejia), Hailam (Hainan). The result was that, for instance, the Hokkiens were more often engaged in rubber plantations and the Hainanese in coffee shop businesses (Cheng, 1985). This could be observed in the dominance of the Hainanese in the MPHB and Supreme Corporation.14

The “semi-feudal, semi-capitalistic, semi-compradore” characteristics of the Malaysian Chinese economic structure also posed an obstacle for its sustainability. Staffing was often not based on meritocracy – i.e. the talents and capabilities of the workers – simply because the towkays could only place their trust in their own sons and other kith and kin. Ironically, many of the young generation had received western education and been acculturated with modern capitalist and individualist spirit and thus held the traditional family-run businesses in contempt. Furthermore, they might have found what they had learned to be inapplicable in their fathers’ traditional businesses. On the other hand, the semi-feudal/paternalistic nature of these traditional family-run businesses might also sow the seed of worker discontent. Table 1 is a translation of Huang Zhilian’s comparison between the structural limitations of the Malaysian Chinese economy with the pre-requisites for capitalistic industrialization (Huang, 1971:47).

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Table 1 Comparison between the Situation of the Malayan Chinese Economy and the Conditions Required for Capitalistic Industrialization

Conditions Required for

Capitalistic Industrialization Contemporary Conditions of the Malayan Chinese Economic System

Politics In power Powerless Capital High profits and rich capital

accumulation enabling reinvestment

“Intermediary” economy with low profits and slow capital accumulation resulting in inadequate conditions for reinvestment

Technology Scientific equipments for production and ever-improving technology

Backward equipments for production and incapability in technological advancement

Management High-level and precise division of labour and systematized, justified personnel management based on “meritocracy”

Imprecise division of labour and the predominance of clanism and bangism in management alienating able personnel

Marketing Capability to a certain extent in expansion and control in the international market

“Intermediary” system of retailing activities under the constraints of international capitalism with negligible ability in expansion and control

Mentality For long-term extensive investment activities to gain larger profits

For immediate profitability, lacking in long-term and comprehensive planning

Source: Huang (1971:47). These structural limitations received an unprecedented attention after the success of MPHB in the midst of the Chinese frustration over the impact of the NEP.15

The Chinese organizations referred to in this paper included the traditional guilds, clan and regionalect associations, religious societies and alumni associations. At the time of the corporatization movement, there were altogether some estimated 4000 such organizations in the country.16 Being non-profit and run by volunteers, these associations and guilds were generally cash-poor but asset-rich, said to add up to a total value of some RM9 billion at the time of the corporation movement.

Most of these organizations were locally run but linked to statewide organizations such as the Chinese assembly halls17, Chinese chambers of commerce or similar guilds and associations at the state level. The statewide organizations were often members of nationwide confederations, such as the Federation of Hokkien Associations of Malaysia 18 , the Malaysian Footwear Manufacturers’ Association19, the Nanyang University Alumni Association of Malaysia, and the Federation of Moral Uplifting Societies in Malaysia20.

Once mainly restricted to social and cultural activities, these guilds and associations were quick to respond to the calls, made during the numerous economic conferences and seminars organized by the Chinese chambers of commerce, Chinese associations and guilds and the Malaysian Chinese Association (MCA – the major ethnic Chinese component party in the Malaysian ruling coalition) in the second half of the 1970s, to restructure the Chinese economy by means of pooling individual resources for sizeable modern commercial undertakings.

The Clan Associations

A Chinese clan association is a grouping based on a real or presumed common ancestry indicated by a common family name or, sometimes, associated family names (names that are often near-homonyms or those written with near-identical characters, e.g., Su 苏 and Xŭ 许, Yu 余 and Xú 徐, or even fictitiously related family names, like Liu 刘, Guan 关 and Zhang 张 whose relationship was established by the novel Romance of the Three Kingdoms, which is part-

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fictitious, part-historical), a common county, district or province resided by the last generation in the family line before migration, often with a specific regionalect. Such an extended circle of kinship is called a zu or jiazu 家族 – a term that has been loaned to the Japanese language as “kazoku”, Korean as “ka-jok” and Vietnamese as “gia-toc”. The term is conventionally translated as “clan”, which is adopted in this paper for convenience, but with the understanding that the “clan” in the traditional Chinese society is not completely similar to that in other societies. The term is used here to refer specifically to the particular variety developed in China in the course of the past millennium with characteristics of its own. The Chinese clan partakes both the nature of the clan as it exists in other parts of the world and the peculiar nature of the Chinese joint-family. This is the reason why many authors prefer to call it by its original Chinese term zu, or by the descriptive term “common descent group”.

The family 家 (jia) and the clan 族 (zu), generally considered as characteristic institutions in traditional Chinese society, play an indispensable role in establishing and sustaining the prevailing value system, in moulding the life of the individuals, and in shaping their social relations into a stable and orderly pattern. In the traditional Chinese society, the family is the basic primary group in which the members maintain close face-to-face relationship with one another in a close-knit life. The clan is the consolidating group organized by the numerous component families that trace their patrilineal descent from a common ancestor who had first settled in a given locality. These families either live in the same community or among several nearby communities in the same geographic region. The clan, although not as close-knit as the family, also provides many of its members occasions of face-to-face relationship and help strengthen the ties of the entire group. These two groupings – the family and the clan – are in many ways mutually dependent and interrelated. Nevertheless, only the paternal relatives are recognized as members of the clan. Maternal relatives and the relatives of the wife are never organizationally bound to the family and the clan.

Having migrated to Malaya, whether shanghaied or by freewill, the newly arrived Chinese normally found assistance from the tongxiang huiguan 同乡会馆 (“common-place-of-origin associations”). Some of these associations were set up on the basis of the xian 县 (county), some on other administrative units like zhou 州 (district) or fu 府 (municipality), or units as large as sheng 省(province). Besides these, there were also family-clan associations based on common family names. All these were interwoven into a complex structure that undertook the responsibility of transplanting the familiar social system of the migrants’ land of origin into Malaya, as well as maintaining and strengthening it.

The long-renowned Chinese ability and tendency to organize societal groupings in the lands of settlement, in the case of Malaya, first brought about the Zhonghua Huiguan 中华会馆 (“Chinese Associations”) and the respective province-based associations, followed by the district- and county-based associations. Confederations came last. In daily life, these associations were responsible in, inter alia, the setting up of schools and credit institutions as well as the provision of funeral assistance.

The reasons for the proliferation of clan associations in Malaya, among others, have a geographical aspect. The clan institution was very strong in southern China, fairly well developed in central China but rather weak in northern China. The fact that almost all of the Chinese immigrants in Malay came from southern China is an important reason for the remarkable growth of clan associations in Malaya.

In the conclusion to her study of Chinese associations in Singapore, Carstens (1975) noted that the “withdrawal of the immigrants’ ties from the Chinese mainland was paralleled by the growth of the clan, district, and dialect associations” and that being Chinese “has always meant being a certain kind of Chinese” (p. 23). People join associations for diverse reasons, many do so apparently for the benefit offered – be it children’s scholarship, or expanding the network of personal relations for business opportunities. While it may not exactly be true that members of the community continue to join the associations for the consciousness of ethno-(re)genesis or reethnicization, the survival of these associations does show that communal organizations as such, which were once the “Guardians of the Diaspora”, have remained congenial to the roles of the ethnic Chinese within the larger society

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Clan (ancestral) associations may be divided into two major types: the family-clan associations (grouped under a family name or related family names) and the regionalect-based associations. The latter may be subdivided into provincial-clan (normally grouped under the province where the last generation resided in China before migration) and district-clan associations (grouped under the district, county or prefecture instead of the larger unit of a province). Such associations have a long history in Malaysia. The earliest ones, listed in Table 2, were those established in 1801 by the Hakka and the Cantonese communities, and by the Hokkiens in 1819, all in Penang. These were followed by those set up by the Teochews and Hainanese in Melaka, respectively in 1822 and 1869.

Table 2 The Earliest Chinese Provincial Associations in Malaysia Year of Bang Association establishment Hakka (Kejia) Kar Yin Fee Kon, Penang 1801 Kwangtung (Guangdong) Kwang Tung and Teng Chow Association, Penang 1801 Hokkien (Fujian) Teng Chow Association, Penang 1819 Teochew (Chaozhou) Teo Chew Hui Kuan, Malacca 1822 Khengchew (Qiongzhou) Kheng Chiew Hoey Koan, Malacca 1869

As shown in Figure 6, three states in Malaysia had a high concentration of such

provincial/clan associations: Perak (122 associations), Penang (121) and Johor (121). Almost all such associations in Perak (117) and Johor (115) were provincial associations while in Penang, the non-provincial clan associations (84) far outnumbered the provincials (27). Penang, in fact, topped the list of states in terms of the number of non-provincial clan associations, followed by Kuala Lumpur (37). On the other hand, Perak and Johor had the largest number of provincial associations. Next on the list came Sarawak (50), Selangor (46), Negeri Sembilan (45), Pahang (39) and Penang (37).

In the case of the provincial associations, a bang-based pattern is discernible. The term bang is used to denote a traditional Chinese politico-socio-economic grouping based principally on a regionalect. The bang institution played a powerful role in dictating the functioning of the early Chinese migrant society in Malaya. Its resilience is well manifested in its survival to this day in shaping the power structure of the traditional communal associations. Seminal studies on the bang institution includes Suyama (1962, 1977) and Cheng (1985). Figure 7 shows the distribution of Chinese associations by bang. Table 3 lists the federations of Chinese provincial associations by bang, number of member associations and year of establishment.

Trade Guilds

Figure 8 shows that the majority of the 567 Chinese trade guilds in Malaysia were found in Johor, Perak, Sarawak, Kuala Lumpur and Penang. The term “guild” may be defined in a broad or narrow sense. One of the lexicographic definitions of the term is as follows: “An association of men belonging to the same class, or engaged in kindred pursuits, or with certain common interests or aims, formed for mutual aid and protection, or for carrying out of a common purpose.” This is a rather broad definition that encompasses not only trade associations but also clan associations as well. Burgess (1928) classified guilds, thus defined, into seven different types: Morse’s “religious fraternity”, formed to do honour to a designated demi-god or canonized worthy; the professional guild, selling services rather than manufacturing goods, including the those of actors, barbers, story-tellers and blind minstrels; the craft guild, consisting of workmen who make articles by hand; the commercial guild – society of merchants who sell goods, retail or wholesale; the provincial guild (social) or huiguan 会馆, which is purely social in nature; the provincial guild (economic), for the protection and promotion of the industry or commerce of its members; the guild merchant, “organized by the entire body of a locality to regulate the trade of the locality and to divert its course to their own benefit” (Morse, 1909, cited in Burgess, ibid.).

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Figure 6 Distribution of Chinese Provincial and Clan Associations in Malaysia at the Time of the Corporatization Movement

N.B. P: provincial associations C: clan associations

Figure 7 Distribution of Chinese Associations in Malaysia by Bang

at the Time of the Corporatization Movement

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N.B. F: Hokkien (Fujian) bang G: Kwangtung (Guangdong) bang K: Hakka (Kejia) bang C: Teochew (Chaozhou) bang Q: Khengchew (Qiongzhou) bang S: Sankiang (Sanjiang) bang

Table 3 Federations of Chinese Provincial Associations in Malaysia ______________________________________________________________________________________ No. of member Year of Bang Federation of associations associations establishment Hokkien (Fujian) 1. Federation of Hokkien Associations of Malaysia 96 1957 2. Associated Eng Choon Societies of Malaysia 32 1957 3. Federation of Foochow Associations of Malaysia 42 1966 4. Federation of Shing An Associations of Malaysia 27 1970 5. Federation of Hwee Ann Associations of Malaysia 11 1976 6. Federation of Chin Kang Associations of Malaysia 12 1977 Kwangtung (Guangdong) 7. Federation of Kwang Tung Associations Malaysia 27 1947 8. Federation of Toishan Associations of Malaysia 11 1947 9. Malaysia Kochow Association 21 1949 10. Federation of San Shui Associations of Malaysia - 1949 11. Persatuan Kwangsi Malaysia* 35 1952 12. Federation of Ko Kong Chow Six Districts Associations of Malaysia 28 1952 13. Federation of Poon Yu Associations of Malaysia 4 1952 14. Federation of Chung San Associations of Malaysia 7 1954 15. Federation of Nam Hoi Associations of Malaysia - 1960 16. Malaysia Wui Ning Association - 1973 17. Federation of Soon Tuck Associations of Malaysia 7 1979 18. Federation of Kwong Siew Associations 13 1980 Hakka (Kejia) 19. Federation of Ka Yin Chu Associations Malaysia 29 1950 20. P.P. Fui Chiu Semenanjung Malaysia 12 1963 21. Federation of Hakka Associations of Malaysia 50 1979 22. Persekutuan Persatuan-persatuan Taipu

(Chha Yong) Malaysia 18 1973 23. Malaysia Cheng Leong Association 10 1979

Teochew (Chaozhou) 24. Federation of Teochew Associations of Malaysia** 44 1934 Khengchew (Qiongzhou) 25. Federation of Kheng Chew Hwee Kuan of Malaysia 66 1933 Sankiang (Sanjiang) 26. Malaysia San Kiang Association 5 1978 N.B. * formerly called the Federation of Oversea Kwai People’s Associations in Malaysia ** formerly called the Federation of Hang Kang Associations in Malaysia

Source: Yeoh (2007: 216), Appendix Table 6.1.

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Figure 8 Distribution of Chinese Trade Guilds in Malaysia at the Time of the Corporatization Movement

For the purpose of this paper, the term “guilds” is applied strictly to the traditional Chinese

trade associations inside and outside China. Imahore Seiji, in his seminal study on the Malayan Chinese guilds, distinguished between guilds formed by employers and those formed by employees. Nevertheless, the guilds that still exist today in Malaysia are nearly all formed by business owners (and normally in the name of the trade, e.g. Foundry and Engineering Industries Association, Association of Footwear Manufacturers, Petroleum Dealers’ Association), sole proprietors (e.g. Sundry Goods Merchants’ Guild) and self-employed merchants and craftsmen (e.g. Hawkers and Petty Traders’ Association).

The origin of the guilds in their present form is a mystery on which there is little or no information. In the Chinese records the development of the crafts, such as stonemasons, silversmiths and carpenters, had been traced through the dynasties in details, but these records give no details of the many forms of organization of such workmen. Instead, the development of the crafts is traced through the various reigns of the ancient Chinese emperors. In many cases the number of workmen of various sorts employed for a specific task in connection with the court is given, but nowhere could be found any references to the organization of guilds. In ancient Chinese literature in general, there is little or no reference to the guilds, as the main interest of the Chinese writers was in matters related to officials and scholars, not artisans or merchants.

However, there have been a few theories regarding the origin of the guilds. In the first place, there are two theories that unfortunately seem rather improbable, viz. that the guilds have originated from the guild merchants or some general organizations of traders, and that they have developed from chambers of commerce. There is simply no evidence that the Chinese guilds were in an earlier era subdivisions of any super-guilds and there seems to be no parallel between the history of the Chinese guilds and that of the breaking-up of the guild merchants in England. On the other hand, the chambers of commerce in China emerged only at the turn of the

15

nineteenth century and though having as their members representatives of the traditional guilds, they could not have been forerunners of these organizations.

There have emerged at least five plausible suggestions regarding the origin of guilds (see Burgess, op. cit.). Firstly, it may be possible that the guilds were originally groups of men banded together for the worship of a supposed founder of a craft or trade and that the various economic functions of the guilds are a later development. The importance of religious practice in certain guilds clearly illustrates the great significance of this element in guild life.

According to another theory, guilds might have originated from family-clan organizations. Towns originally dominated by one clan might have taken in members of other clans as they expanded but leaving the monopoly of their particular trade or trades in the hands of the original clan, hence forming guilds within the city population. It might also have been that people of one clan (or those with one family name), on arrival in a nearby town, formed a monopolistic association to protect themselves (clan members) while scraping out a living in their new domicile.

It is also possible that the guilds in fact grew out of provincial or district associations. When people from one district moved to another place they frequently formed associations for mutual protection.

In China, from ancient days taxes of one kind or another had been levied on commercial transactions. In response, craftsmen and merchants had resorted to unite themselves in the form of guilds in order to present a solid front against excessive taxation. The Chinese guilds might thus have emerged primarily as a means of protection against official exploitation. In fact, recent centuries have witnessed the solidarity of guild action amidst the conflicts between Chinese merchants and foreign traders in China.

Finally, establishing guilds might have been the only possible group action to sustain a livelihood in a situation where there was simply not enough work to provide subsistence for everyone. The persistent population pressure upon the food supply in China provided natural incentives towards the formation of monopolistic groupings to protect collective interests in a given district. Chambers of Commerce

From the historical perspective, the Chinese chambers of commerce (zhonghua zongshanghui 中华总商会), with representatives of the traditional guilds as their members, are organizations of relatively recent origin. At the turn of the nineteenth century, the national and provincial governments in China played an active role in the promotion of chambers of commerce. Yuan Shikai 袁世凯, the perfidious powerbroker who later wangled his way into the first presidency of the new-born Chinese republic, suggested in 1900, while he was holding the governorship of the Shandong province, that a chamber of commerce to be organized for the entire province. By 1915, a total of 869 chambers of commerce had been established, representing 230,431 shops. After the 1911 Republican Revolution, the Chinese Ministry of Agriculture and Commerce was given the task of supervising these commercial bodies, and in 1914, promulgated a series of regulations that defined a chamber of commerce as “a group of businessmen who are either officers of corporations, representatives of guilds, or men who are independently interested in industrial or commercial enterprises, who have not been deprived of their rights of citizenship, who have not outstanding any uncancelled decree of bankruptcy, and who are not afflicted with nervous diseases” (Burgess, 1928).21

In Malaysia, the first chamber of commerce is known to have existed since 1903. In every state of the country there is at least one chamber of commerce. When there were a number of chambers within a state, an associated chambers of commerce would normally be established. For instance, the Johor Associated Chinese Chambers of Commerce is a confederation of the Johor Bahru, Batu Pahat, Muar, Kluang, Pontian, Kota Tinggi and Mersing Chambers of Commerce. Table 4 gives a list of some of the chambers of commerce in the country with their dates of establishment arranged chronologically.

16

Table 4 Malaysian Chinese Chambers of Commerce

Date of Chamber of Commerce establishment

Penang Chinese Chamber of Commerce 1903 Kuantan Chinese Chamber of Commerce 1903 Selangor Chinese Chamber of Commerce 27 March 1904 Perak Chinese Chamber of Commerce 1907 Batu Pahat Chinese Chamber of Commerce 1908 Sandakan Chinese Chamber of Commerce 1909 Raub Chinese Chamber of Commerce 1911 Kota Kinabalu Chinese Chamber of Commerce August 1911 Kelantan Chinese Chamber of Commerce 1912 Temerluh Chinese Chamber of Commerce 1921 Miri Chinese Chamber of Commerce 1925 Baram Chinese Chamber of Commerce 1927 Kedah Chinese Chamber of Commerce 14 June 1936 Terengganu Chinese Chamber of Commerce 2 September 1945 Pahang Chinese Chamber of Commerce 1946 Gambang Chinese Chamber of Commerce 5 May 1946 Kelang Chinese Chamber of Commerce 28 May 1946 Negri Sembilan Chinese Chamber of Commerce 8 September 1946 Johor Associated Chinese Chambers of Commerce 1 August 1947 Kota Tinggi Chinese Chamber of Commerce 10 October 1947 Sibu Chinese Chamber of Commerce 1948 Sabah United Chinese Chambers of Commerce 1955 Tuaran Chinese Chamber of Commerce 22 April 1956 Pasir Mas Chinese Chamber of Commerce 1957 Semporna Chinese Chamber of Commerce 14 June 1959 Muar Chinese Chamber of Commerce 1964 Sarawak Associated Chinese Chambers of Commerce 10 April 1965 North Perak Chinese Chamber of Commerce 1966 Keluang Chinese Chamber of Commerce * Kudat Chinese Chamber of Commerce * Melaka Chinese Chamber of Commerce * N.B. * Dates unavailable due to loss of records during the Second World War Source: Mahua Shanghui Shi (History of Chinese Chambers of Commerce of Malaysia), commemorative issue of the 27th anniversary of the Associated Chinese Chambers of Commerce of Malaysia, Kuala Lumpur, 1974.

On 23rd February 1947, the Associated Chinese Chambers of Commerce of Malaya was established. Its declared objective was to establish close contact between Chinese chambers of commerce in various parts of the country in order to promote and protect commercial interests, to assist the agricultural, mining and manufacturing industries, and to maintain close liaison with the chambers of commerce of the other races with the eventual aim of achieving prosperity and enhancing public welfare. The Associated Chambers had as its members the chambers of commerce of the states and districts in Malaya, including the Singapore Chinese Chamber of Commerce, which was one of its founders. With the secession of Singapore and the birth of Malaysia, the Associated Chambers subsequently changed its name to the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), with two new members, viz. the

17

Sarawak Associated Chinese Chambers of Commerce and the Sabah United Chinese Chambers of Commerce. Although the Singapore Chinese Chamber of Commerce left the Associated Chambers, a liaison committee of the two was formerly set up on 21st February 1970.22 Alumni Associations

Besides the clan associations, trade guilds and chambers of commerce, there exist other types of associations and groupings in the Malaysian Chinese community. One of them is the alumni association. Like guilds and clan associations, it can be observed in Table 5 that these alumni associations are largely concentrated in those states with substantial Chinese population. In addition to the Chinese-based alumni associations of secondary and primary schools in Malaysia (75.45 per cent), there are other types of Chinese-based alumni associations of diverse backgrounds (24.55 per cent), such as that of the former Chinese-medium Nanyang University, those of the teachers’ colleges, those formed by alumni of Taiwanese educational institutions, and those by temporary teachers. In addition, there are the Chinese educational organizations of Dongzong (the UCSCAM – United Chinese Schools Committees Association of Malaysia) and Jiaozong (the UCSTAM – United Chinese Schools Teachers Association of Malaysia). The two organizations (jointly known as Dongjiaozong) played a momentous role in spearheading the Independent Chinese Secondary Schools Movement that has represented since the 1970s a reaction to the conversion of the majority of Chinese secondary schools to either Malay-medium "National" secondary schools or English-medium "National-type" ones (which were later also converted into Malay-medium) in 1962. Completely funded by donations from the Chinese community, these independent schools that total 60 at present, together with the Chinese primary schools (categorized as "government-aided" eligible for limited matching grants but whose survival depends crucially upon financial support from the Chinese community), have always been viewed as the last bastion of Chinese ethnic identity.

Table 5 Distribution of Chinese-based Alumni Associations in Malaysia at the Time of the

Corporatization Movement

Secondary Schools

Primary Schools

Nanyang University

Taiwan Graduate Association

Teachers Colleges

Chinese Schools Teachers Association

Temporary Teachers

Higher Teachers Colleges

TOTAL

Terengganu 1 2 - - - 1 - - 4

Kelantan - 2 - - - 1 - - 3

Perlis 1 2 - - - 1 - - 4

Pahang 3 6 - - 1 4 - - 14

Kedah 3 9 - 1 1 3 - - 17

Melaka 3 9 - 1 1 1 - - 15

Johor 5 4 1 3 - 7 - 2 22

Negeri Sembilan

7 16 - 1 1 1 1 - 27

Perak 12 49 1 2 - 8 1 2 75

Penang 7 30 1 1 1 2 - 2 44

Selangor 7 37 - 4 - 1 1 - 50

Kuala Lumpur

7 24 2 2 2 1 2 - 40

Sabah 3 - 3 5 - - - - 11

Sarawak 3 - - 5 - - - - 8

TOTAL 62 190 8 25 7 31 5 6 334

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Rise and Fall of the Communal Investment Companies23 It is generally believed that there were not less than 150 associations and guilds that had

actually gone into planning to set up their investment holding companies or cooperative societies, or both. A conservative estimate would put the number of such investment holding companies actually organized to more than 50. The active ones, however, numbered only around 10.

Although the formation of such companies outwardly seems to be a response to the call of the pioneering MPHB and its patron MCA, the actual factor behind such a change lies in the latent structural weaknesses of the traditional family-enterprises and the semi-feudal, semi-capitalistic and intermediary nature of the traditional Chinese economic activities in this country. In other words, the very weaknesses of the traditional system itself would sooner or later bring about either its own demise, or as it turned out to be, transformation with the State’s discriminatory preferential policies acting as a powerful stimulant and the success of KSM and MPHB the timely push.

However, by March 1983 the number of investment companies successfully launched was only 19. Some of the larger ones organized by regionalect-based associations were Hoklian Holdings Bhd. (Hokkien), Fui Lian Holdings Bhd. (Hokkien – Fui Chiu), Ka Yin Holdings Bhd. (Hakka – Ka Yin), Holian Holdings Bhd. (Hakka – Ho Po) and Grand Ocean Development Bhd. (Hainanese – Keng Chew). While the larger holding companies did stay and grow, many others had remained dormant or faced acute losses over the years.

These community investment holding companies can be broadly grouped under 3 categories in terms of their linkages and affiliations: those linked to political parties, those linked to associations and those linked to guilds and other organizations (Table 6).24 Table 6 Malaysian Chinese Community Investment Companies during the

Corporatization Movement

Date of Address of Company Organizer Incorporation Registered Office

(A) Chamber of Commerce H1 UNICO Holdings Bhd * Associated Chinese Chambers of 21-5-81 Kuala Lumpur Commerce and Industry of Malaysia (ACCCIM) H2 Penang Commercial & Penang Chinese Chamber of 18-4-73 Penang Industrial Development Commerce Bhd ** H3 Keat Hua Holdings Kedah Chinese Chamber of 9-9-81 Alor Setar, Kedah (Kedah) Bhd ~ Commerce H4 Chunghua Holdings Bhd ~~ Persatuan Perniagaan China Kuantan 1975 Kuantan, Pahang H5 Kepong Commercial Persatuan Firma-firma, Kepong 28-7-81 Kuala Lumpur Holdings (M) Bhd (B) Trade Guilds H6 FOMFEIA Bhd ^ Federation of Malaysian Foundry 11-12-80 Kuala Lumpur and Engineering Industries

Associations (FOMFEIA)

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H7 Petroleum Dealers’ Perak Petroleum Dealers 3-12-82 Ipoh, Perak Holding Bhd ^^ Association H8 Funsun Holdings (M) Federation of Hawkers and Petty 23-10-81 Batu Pahat, Johor

Bhd † Traders Associations of (West)

Malaysia H9 United Rice Wholesalers Persatuan Pemborong-pemborong 19-12-81 Kuala Lumpur Enterprise Bhd Beras, Semenanjung Malaysia H10 Sundry Goods Merchants Selangor Teo-Chiu Sundry Goods 18-12-81 Kuala Lumpur Guilds (Selangor) Holdings Merchants Guild Sdn Bhd H11 Grocery and Sundry Persatuan Kedai-kedai Runcit, 24-2-82 Batu Pahat, Johor Merchants Holdings Bhd Johor H12 Motorcycle Dealers Selangor & Wilayah Persekutuan 14-4-81 Kuala Lumpur Holdings Sdn Bhd Motorcycle and Scooter Dealer Association

(C) Family-Clan Association H13 United Chias’ Corporation Chia Association of Malaysia 19-1-83 Kuala Lumpur Bhd †† H14 How Bee Holdings Penang How Bee (Teoh) Association 3-11-81 Penang Sdn Bhd ‡

(D) Provincial-Clan Association H15 Hoklian Holdings Bhd # Federation of Hokkien Associations 5-6-80 Kuala Lumpur in Malaysia H16 Kwai Lian Holdings Bhd # Persatuan Kwangsi Malaysia 9-6-83 Kuala Lumpur

(E) District-Clan Association H17 United Teochew Federation of Teo Chew Associations 17-2-81 Kuala Lumpur (Malaysia) Bhd ## of Malaysia H18 Teochew Holdings Penang Teo Chew Association 6-7-81 Penang (Penang) Bhd H19 Ka Yin Holdings Bhd ## Federation of Ka Yin Associations 19-2-80 Kuala Lumpur of Malaysia H20 Lung Yen Enterprise Federation of Lung Yen 4-3-82 Kota Kinabalu, (Holdings) Sdn Bhd + Associations of Malaysia Sabah H21 Chin Kang Holdings + Federation of Chin Kang 1-12-81 Kuala Lumpur (Selangor) Berhad Associations of Malaysia H22 Ann Koai Holdings Bhd + Selangor Ann Koai Association 15-6-81 Kuala Lumpur

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H23 Holian Holdings Bhd ## Persatuan Ho Po Malaysia 12-10-81 Kuala Lumpur H24 Fui Lian Holdings Bhd ## Selangor Fui Chiu/Hui Aun 3-7-81 Kuala Lumpur Association H25 Pu-lien Holdings (M) Bhd + Persekutuan Persatuan-persatuan 15-2-84 Kuala Lumpur Taipu (Chha Yong) Malaysia H26 Chung San Holdings Chung San District Society, 26-6-81 Kuala Lumpur (Malaysia) Bhd + Malaysia H27 Yunglian Enterprise Bhd + Associated Eng Choon Societies 3-7-82 Kuala Lumpur of Malaysia H28 Lung Kong Holdings Bhd + Lung Kong Federation of Malaysia 3-10-80 Kuala Lumpur H29 Grand Ocean Development Persatuan Keng Chew Selangor 4-8-80 Kuala Lumpur Bhd ##

(F) Alumni Associations

H30 Chung Ling Holdings Bhd ++ Chung Ling Old Boys’ Association 29-4-74 Kuala Lumpur H31 Jit Sin Holdings Bhd ++ Jit Sin School Union 19-2-81 Penang H32 Yoke Kuan Ex-pupils’ Yoke Kuan Ex-pupils’ Association 27-4-81 Kelang, Selangor Holdings Sdn Bhd ++ H33 Hua Jin Holdings Bhd ++ Persatuan Bekas Murid-murid 31-7-79 Batu Pahat, Johor Sekolah Menengah Hwa Jin

(G) Political Party H34 Multi-Purpose Holdings Malaysian Chinese Association 18-8-75 Kuala Lumpur Bhd ∆ H35 Matang Holdings Bhd ∆∆ Johor M.C.A. 1978 Johor H36 Aik Hua Holdings Bhd ∆∆ Selangor M.C.A. 13-5-81 Kuala Lumpur H37 Panwa Development Bhd ∆∆ Pahang M.C.A. 14-1-81 Mentakab, Pahang H38 Peak Hua Holdings Bhd ∆∆ Perak M.C.A. 1981 Perak Source: Identified and compiled by the author. N.B.: * Unico is known as “Shanglian” in Chinese (short for “Malaixiya Huaren Gongshang Lianhehui”, i.e. the

ACCCIM). Since incorporation, it had been declared to be a leader in the corporatization movement by its promoter, the ACCCIM.

** Penang Commercial’s board of directors consisted of 7 members (besides the PCCC), who were prominent personalities in the Penang business circle: Datuk Chong Han Leong, Choot Ching Khoon, Chang Cheng Guan, Koh Pen Ting (the late father of the former Penang Chief Minister, Tan Sri Dr Koh Tsu Koon), Foo Yee Fong, Loh Boon Siew and Neoh Choo Ee. Koh Pen Ting was also on the Unico board.

21

~ “Jihua” (Keat Hua) meaning “Kedah Chinese”. Shareholdings were restricted to members of the KCCC. Its 7 directors were all from Alor Setar. One of them, Dato’ Lee Seng Cheng, who was the chairman of the KCCC, was also one of the directors of Unico.

~~ “Zhonghua” means “Chinese”. The company was at first intended to be named Syarikat Perdagangan dan Perindustrian Persatuan Perniagaan China Kuantan Bhd – quite a mouthful.

^ Initially named Quality Foundry and Engineering Sdn. Bhd., the company altered its name to Fomfeia Sdn. Bhd. On 9-4-83 and was subsequently converted into a public company on 27-2-84. Its name is the acronym representing its founder organization that represents the more than 5,000 basically Chinese-dominated foundries, machine shops, steel fabrication plants and precision engineering establishments in the country.

^^ Though the original intention was to trade in petroleum products and to operate service stations, the Perak-based Petroleum Dealers’ Holdings Bhd. since its commencement of operations on 1-8-83 dealt principally in the trading of motor vehicle accessories.

† “Fanshang” (Funsun) means “hawkers and petty traders”. The Batu Pahat-based Funsun’s founder is a confederation formed by the 36 Hawkers and Petty Traders Associations in East and West Malaysia. See also note 22 below.

†† Chia: “Xie” in Mandarin. United Chias’ had a paid-up capital of only RM18,000. ‡ Teoh: “Zhang” in Mandarin. How Bee had 48 shareholders (paid-up capital: RM600,000), 79 per cent were

Teohs. # Hoklian (Fulian) of the Fujianese (Hokkien) – from the Chinese province (shen) of Fujian. Kwai Lian

(Guilian) of the Kwangsi people – from the province of Guangxi. “Kwai” (“Gui”) is the shorter name for the Guangxi (Kwangsi) province, like “Min” for Fujian, “Yue” for Guangdong, “Shu” for Sichuan, etc.

## United Teochew of the Teochew (Chaozhou) people; Ka Yin (Jiaying) of the Ka Yin people – from Jiaying, known today as Meixian; Holian (Helian) of the Ho Po (Hepo) people; Fui Lian (Huilian) of the Fui Chiu/Hui Aun people – from the Chinese county (xian) of Huizhou/Hui’an; Grand Ocean (Dayang) of the Keng Chew (Qiongzhou) people. Grand Ocean later became a fully owned subsidiary of Grand United Holdings Bhd (H29a), a former associated company of the Grand Ocean.

+ Ann Koai (Anxi), Chin Kang (Jinjiang), Chung San (Zhongshan), Pu-lien (Pulian – set up by the Dapu/Chayang people), Yunglian (Yonglian – set up by the Yongchun people), Lung Kong (Longgang) and Lung Yen (Longyan) were the companies established by district-clan associations that remained inoperative since incorporation.

++ The most important company set up by alumni associations of the Chinese-based Malaysian schools (including Chinese-medium primary schools and Malay-medium “National-type” Chinese secondary schools) was the Kuala Lumpur-based Chung Ling set up by the national confederation of the Chung Ling Old Boys’ Associations, the alumni associations of the Zhongling Zhongxue (Chung Ling High School) in Penang. Others were Hua Jin established by the alumni association of the Huaren Zhongxue (Sekolah Menengah Hwa Jin) in Batu Pahat, Jit Sin by the alumni association of the Rixin Zhongxue (Jit Sin High School) in Bukit Mertajam, Penang, and Yoke Kuan Ex-pupils’ by the alumni association of the Yuqun Xiaoxue (S.R.J.K. Yoke Kuan) in Sekinchan, Selangor. The last had been inoperative since incorporation.

∆ MPHB is known in the Chinese community as Mahuà, short for Malaixiya (Malaysian) Duoyuanhua (multi-purpose). Its founder, the MCA, is known as Mahuá, short for Malaixiya (Malaysian) Huaren (Chinese) Gonghui (association).

∆∆ Apart from MPHB that was formed under MCA’s first five-point programme, the party in its second five-point programme called upon every state-level MCA machinery to set up a holding company fashioned after MPHB. Four states did it: Selangor with Aik Hua (“Yihua” meaning “to benefit the Chinese”), Pahang with Panwa (“Penghua” meaning “Pahang Chinese”), Johor with Matang, and Perak with Peak Hua (“Pihua” meaning “Perak Chinese”).

By 1986, when the crisis struck the DTCs, the Chinese communal investment companies,

which mushroomed during the late 1970s and early 1980s as an effort towards economic self-strengthening, appeared to have lost their early-day enthusiasm if not direction. Beset with certain structural weaknesses from the start, these community investment companies by then seemed to be uncertain if they could still look upon their forerunner – H34 – for guidance and inspiration. Originally, the success of H34 had been said to have induced the birth of the “economic self-strengthening” or “corporatization” movement, during a period characterized by the proliferation of community investment holding companies set up by the various Chinese associations and guilds in the country. Nevertheless, H34 – set up by the MCA in May 1977 “as a catalyst to show the way towards the corporate concept for the Malaysian Chinese community to emulate”, was by now still licking its wounds caused by the 1986 record RM228.4 million bottom-line loss. This setback of H34 and the unimpressive performance of some of the community investment

22

companies had begun to usher the return of a climate of frustration and pessimism that loomed during the first half of the 1970s over the Chinese community.

Table 7 Group Performance of the Major Malaysian Chinese Investment Holding

Companies during the Corporatization Movement Company Paid-up

Capital (RM ’000)

Pre-tax Profit

(loss in bracket)

(RM ’000)

Company Paid-up Capital

(RM ’000)

Pre-tax Profit

(loss in bracket)

(RM ’000) H34 (31-12-86) 751,028 (57,272) (–) H8 (31-12-84) 12,202 (217) (–) H35 (30-6-85) 60,000 5,086 (–) H19 (30-6-85) 10,000 (6,703) (–) H1 (30-3-85)* 50,000 1,893 H17 (31-3-86) 6,170 473 (–) H29 (30-6-85)** 41,811 7,117 (+) H33 (31-12-83) 5,168 196 (+) H38 (31-12-84) 36,014 (5,382) (–) ^ H30 (30-4-85) 3,062 139 (–) H15 (31-12-85) 27,000 (84) (+) H2 (30-6-85)# 1,000 621 (–) H37 (30-6-85) 20,782 (896) (–) H12 (31-8-85) 655 (91) (–) H36 (31-3-86) 20,090 (932) (–) H6 (31-5-85)# 270 10 (+) H24 (30-9-85) 18,100 168 (–) H7 (31-12-84)# 158 0.5 (–) H23 (31-3-85) 14,759 288 (–) H31 (31-3-83)# 30 0.8 N.B.: * 18 months ended 31st March 1985. There was no inter-period compensation for profit as the

subsidiary companies had not yet commenced operations as at 30-9-1983. ** 18 months ended 30th June 1985. During the period the company became a subsidiary of the

H29a, formerly known as the Textile Corporation of Malaya Bhd, then H29’s associate company. ^ Compared with 16 months ended 31-12-83. # For those without subsidiaries, company results were given. (+) Indicates an increase in profit/decrease in loss/rise from loss to profit. (–) Indicates a decrease in profit/increase in loss/sink from profit into loss. Parochialism and Broad-based Shareholding Structure

The problems facing these community investment companies were mainly structural or built-in. These problems were basically a carry-over from their founders, the multifarious Chinese associations, many of which were still operating along traditional lines and were often dominated by parochial leadership. Of the 27 companies in Figure 9, nearly half (13) were founded by clan associations, whose leadership and administrative structure were of a most traditional, parochial nature. Equally traditional and outmoded were the administration of the trade guilds (3) and chambers of commerce (3).

Table 8 shows the number of shareholders in the community investment companies. Most of these community investment companies had a broad-based shareholding structure, often with no single shareholder. Except for H34, where 20 per cent of its 46,491 shareholders possessed 54.78 per cent of its shares (41 per cent belonged to KSM), and H2925, among the operating companies (thus not taking into consideration those dormant ones, many of which had no more than the few initial subscribers’ shares), the maximum individual shareholders’ holdings were no more than 20 per cent of the total issued share capital. For instance, H2 had 20 per cent (issued share capital 1,000,005; range of individual shareholdings 100 – 200,000), H31 13 per cent (30,400; 200 – 400), H12 7.63 per cent (655,000; 5,000 – 50,000), H7 6.33 per cent (158,000; 1,000 – 10,000), etc. Under such circumstances, the leaders of the sponsoring organizations always became directors of these investment companies.

23

Figure 9 Major Malaysian Chinese Investment Holding Companies at the Time of the Corporatization Movement by Type of Founder Organization

Table 8 Number of Shareholders in the Major Malaysian Chinese Investment Holding Companies during the Corporatization Movement

Company No. of

Shareholders State of Operation

Company No. of Shareholders

State of Operation

H34 (31-12-85) > 500 Operating H7 (27-5-85) 74 Operating H1 (29-8-85) > 500 Operating H14 (2-8-84) 48 Inoperative H15 (28-6-86) > 500 Operating H6 (13-10-85) 46 Operating H37 (6-1-86) > 500 Operating H9 (21-7-85) 44 Inoperative H36 (17-9-85) > 500 Operating H12 (28-2-86) 34 Operating H24 (29-3-86) > 500 Operating H31 (21-12-84) 16 Operating H23 (10-9-85) > 500 Operating H32 (19-12-84) 12 Inoperative H19 (21-12-85) > 500 Operating H3 (30-3-84) 7 Inoperative H33 (27-12-84) > 500 Operating H27 (31-12-84) 5 Inoperative H30 (14-12-85) > 500 Operating H21 (28-2-85) 4 Inoperative H17 (31-1-86) > 500 Inoperative H28 (14-6-85) 4 Inoperative H29 (18-12-85) # Operating H16 (24-12-85) 3 Inoperative H2 (27-12-85) 329 Operating H22 (5-2-85) 2 Inoperative N.B.: # H29 became a fully owned subsidiary of H29a (formerly Textile Corporation of Malaya, an

associated company of H29) during the 18-month period ended 30th June 1985. {Prior to this, it had more than 500 shareholders.

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Association Mentality and Board Composition

One of the widely held criticisms directed at the communal investment companies was that they were being dominated by directors with “association-mentality”, who could not think and act like modern corporate people. Even though these companies might have a management team comprised of professionals, very often the board of directors who made business decisions did not share a common vision or understanding with the management. The corporate personnel in such a set-up were usually not given enough authority and the company suffered because the decision-making process on the part of the board could be very slow if not controversial. The usually large composition of the board of these companies (Table 9) might partly explain the difficulty in arriving at a consensus in meetings. Even the call for board meeting might be thwarted in the case of certain companies, normally set up by national associations, that had purposefully appointed as directors representatives from all states to show a “national” character and to satisfy the status demand of the member associations nation-wide. The distribution of the associations and guilds as a whole is shown in Figure 10 (see also the earlier separate Figures 6, 7, 8 and Table 5).

Table 9 Number of Directors in the Major Malaysian Chinese Investment Holding Companies during the Corporatization Movement

Companies No. of Directors Companies No. of DirectorsH1 (15-7-86) 22 H26 (30-6-85) 9 H24 (30-9-85) 20 H7 (27-5-85) 9 H34 (31-12-85) 18 H28 (14-6-85) 8 H17 (31-1-86) 18 H12 (28-2-86) 8 H15 (31-12-85) 16 H36 (31-3-85) 8 H29 (30-6-85) 15 H2 (30-6-85) 7 H19 (30-6-85) 15 H3 (30-3-84) 7 H33 (31-12-83) 13 H31 (3-1-85) 6 H23 (10-9-85) 12 H32 (19-12-84) 5 H37 (30-6-85) 12 H27 (31-12-84) 4 H30 (14-12-85) 11 H21 (8-1-86) 3 H9 (3-3-86) 10 H16 (24-12-85) 3 H6 (15-1-86) 10 H22 (5-2-85) 2 H14 (2-8-84) 9

In Figures 6, 7, 8, 10 and Table 5 above the Malaysian states (and the capital city Kuala

Lumpur) are arranged from the most homogeneous in ethnic composition to the most heterogeneous. Those with a degree of ethnic diversity below 50 percent are the predominantly Malay states, whereas those with a degree of ethnic diversity above 50 percent can be defined as multiethnic states, with the exception of the Borneo states of Sabah and Sarawak that should be considered separately due to its very different ethnic makeup (see Figure 11, computed from data in Figure 12). Unsurprisingly, there are fewer Chinese associations in the predominantly Malay states than in the multiethnic states. The degree of ethnic diversity is here measured by the index of ethnic fractionalization (EFI) that indicates the probability that a randomly selected pair of individuals will belong to different ethnic groups (Yeoh, 2003b: 28). The computation of the ethnic fractionalization index here for the Malaysian states are based on the latest (2000) Population and Housing Census (data for Singapore and Brunei are from the CIA World Factbook 2005).

25

Figure 10 Distribution of Chinese Associations in Malaysia

N.B. P: provincial associations, including all associations based on common place of origin (province, district, county, etc.) C: clan associations, including all associations based on common ancestry (common family name, joint family name, common regionalect, etc.) T: trade guilds A: alumni associations

Figure 11 (a) (b)

Source: Yeoh (2006: 235), Figure 16.

26

Figure 12

(a) (b)

Limited Business Portfolio and Over-cautiousness

Due to the traditional background of the board members, most of these companies tended to have a business portfolio limited to a few activities like property development, plantations, credit and leasing.26 Conflict of Interests

More serious than the lack of corporate leadership at the board level, probably, was the presence of conflict of interests among the directors of these investment holdings companies. The fact that many of the directors were themselves involved in personal businesses, or were owners of landed assets, had sometimes resulted in the boards making corporate decisions based on non-business considerations.27

As shown in Table 7 earlier, most of these Chinese investment holding companies had reported less-than-satisfactory results. While, to a certain extent, the economic slowdown was to blame for that, the internal structural weaknesses of the board of directors and the narrow scope of operations had also contributed to the overall unimpressive performance of these companies. It is interesting to note that in the heyday of the economic self-strengthening movement, a number of these Chinese investment holding companies were talking about their plans to seek listing. This did not seem to be the prospect anymore by 1986.

Source: Yeoh (2006: 225), Figure 2; computed with data from Malaysian Department of Statistics, Banci Penduduk dan Perumahan 2000/2000 Population and Housing Census.

27

Table 10 Business Activities of the Major Malaysian Chinese Investment Holding

Companies (Groups) during the Corporatization Movement

N.B.: * no subsidiary ih investment holdings ms management services (parent company) tc manpower training & consultancy pl plantation pr property lh leasing & hire purchase financing ml licensed moneylenders mj marketing of jewellery ts trading in securities ti trading in pig iron tm trading in motorcycles ta trading in motor vehicle accessories ai agent for motor & general insurance mi miscellaneous: cultivation of oil palm, rubber, cocoa & the processing of its own & purchased

crops; trading & marketing of commodities; palm oil refining; provision of research & development, agriculture and management consultancy services; importing & distribution of consumer goods, fertilizers, chemicals, building materials & engineering equipment; general engineering contracting business; housing equipment & property investment; commercial banking, finance & general insurance; ownership & operation of ships for charter hire & cargo services; provision of management services

Company Year ended Ih ms tc pl pr lh ml mj ts ti tm ta ai mi H34 31/12/85 √ √ √ √ √ √ √ H1 31/3/85 √ √ √ √ √ H29 30/6/85 √ √ √ H15 31/12/85 √ √ H37 30/6/85 √ √ √ √ H36 31/3/85 √ √ √ √ √ H24 30/9/85 √ √ √ √ √ H23 31/3/85 √ √ √ H19 30/6/85 √ √ √ H33 31/12/83 √ √ H30 30/4/85 √ √ H2* 30/6/85 H12* 31/8/85 √ √ H6* 31/5/84 √ H7* 31/12/84 √ H31* 31/3/83 √

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Table 11 Range of Shareholdings of the Major Malaysian Chinese Investment Holding

Companies during the Corporatization Movement Company Range of

ShareholdingsIssued Share

Capital

Company Range of Shareholdings

Issued Share

CapitalH34 (31-12-85) 1,666 – 732,166 751,028,000 H14 (31-12-83) 1,000 – 15,000 600,000H1 (31-3-85) 6,000 – 50,001 50,000,000 H6 (31-5-85) 5,000 – 10,000 267,502H29 (30-6-85) 1,000 – 121,000 41,811,000 H7 (31-12-84) 1,000 – 6,000 158,000H15 (31-12-85) 1,000 – 209,000 27,000,000 H31 (31-3-83) 2,000 – 4,000 30,400H37 (30-6-85) 1,000 – 11,001 20,782,000 H26 (30-6-85) 1 – 5,001 22,506H36 (31-3-85) 10,000 – 20,000 20,090,000 H9 (21-7-85) 1,000 16,400H24 (30-9-85) 2,000 – 504,001 18,100,003 H32 (19-12-84) 1 8,300H23 (31-3-85) 1,000 – 500,000 14,758,714 H3 (30-3-84) 1,000 7,000H19 (30-6-85) 1,000 – 1,042,000 10,000,000 H21 (8-1-86) 1,000 3,001H17 (31-1-86) 6,169,502 H27 (31-12-84) 1 5H33 (31-12-83) 100,000 – 140,000 5,168,000 H28 (14-6-85) 1 4H30 (30-4-85) 20,000 – 100,000 3,061,500 H16 (24-12-85) 1 3H2 (30-6-85) 1 – 58,001 1,000,005 H22 (5-2-85) 1 2H12 (31-8-85) 20,000 – 30,000 655,000 The Deposit-Taking Cooperatives: The Making of a Fiasco28

If it had been the failure of H34 and the stagnation of the other Chinese investment holding companies that served to cool down the early zeal for economic self-strengthening and corporatization and shatter the optimism for the possible wholesale transformation of the economic structure of the Malaysian Chinese community, a final blow might have come from the DTC (deposit-taking cooperative) crisis of 1986. It was a crisis that spelt the end for most, if not all, of the major Chinese-based cooperatives, many of which were set up during the height of the self-strengthening campaign; it was also a crisis that victimized the vast lower-middle-class Chinese.

It all began in early 1986 with the collapse of a credit and leasing company that took deposits29, sending shockwaves amongst the public. The confidence crisis instantly led to the subsequent large-scale withdrawal on the other DTIs (deposit-taking institutions), and in particular, the DTCs. Despite apprehension since early 1985 amongst economists, bankers and government officials that some cooperatives were having difficulties, no action was taken until June 1986, when C24 led the way to set off the tremors.30 Registered on 17th January 1977 by its founder-chairman, C24 soon grew rapidly since registration into one of the cooperative giants31. By 31st December 1985, its total assets had reached RM129,600,000, with 67 operating branches throughout West Malaysia. With 14,541 members, it appeared to have 19 subsidiary companies. Besides, in 1982/83 C24 was number eight in terms of total assets (Table 13), while C1 notably topped both the asset and membership lists (Tables 12 and 13)32.

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Table 12 Malaysia: Top 20 Cooperatives (by Membership), 1982/83 Cooperative Membership 1 Koperatif Serbaguna Malaysia Berhad (KSM) 209,220 2 The Coop Central Bank Ltd. (CCB) 179,347 3 Koperasi Insurans Malaysia Berhad (MCIS) 120,222 4 Koperasi Usaha Bersatu Malaysia Berhad 95,900 5 Koperasi Angkatan Tentera Berhad 75,000 6 National Land Finance Co-operative Society Ltd. 67,248 7 Koperasi Jayadiri Malaysia Berhad (Kojadi)* 58,082 8 Koperasi Polis Diraja Malaysia Berhad 35,877 9 Syarikat Nesa Pelbagai Berhad 32,508 10 Koperasi Shamelin Berhad 28,559 11 Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat) 28,134 12 Koperasi Pekerja Jaya Berhad 22,099 13 Koperasi Pemodalan Felda Berhad 21,196 14 Koperasi Pembangunan Ekonomi Pemuda Malaysia Berhad (Komuda)* 20,994 15 Koperasi Kewangan Perindustrian Malaysia Berhad (MIFC)* 18,612 16 Koperasi Mewah Berhad (Komewah)* 16,868 17 Koperasi Lembaga Letrik Negara Berhad 16,680 18 Koperasi Telekom Malaysia Berhad 16,242 19 Koperasi Rakyat Berhad (Korakyat)* 15,010 20 Koperasi Belia Bersatu Berhad (Kosatu)* 11,805 N.B. * hit by the 1986 freeze

Table 13 Malaysia: Top 20 Cooperatives (by Total Assets), 1982/83 Cooperative Total Assets (RM) 1 Koperatif Serbaguna Malaysia Berhad (KSM) 700,111,066 2 Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat) 550,243,000 3 The Coop Central Bank Ltd. (CCB) 476,765,229 4 Koperasi Insurans Malaysia Berhad (MCIS) 263,787,957 5 National Land Finance Cooperative Society Ltd. 166,389,405 6 Koperasi Polis Diraja Malaysia Berhad 95,659,652 7 Koperasi Angkatan Tentera Berhad 68,053,325 8 Koperasi Belia Bersatu Berhad (Kosatu)* 51,614,351 9 Koperasi Mewah Berhad (Komewah)* 51,546,589 10 Koperasi Jayadiri Malaysia Berhad (Kojadi)* 47,599,606 11 Koperasi Serbaguna Kosmopolitan Berhad (Kosmopolitan)* 46,863,825 12 Koperasi Serbaguna Cuepacs Berhad 40,386,812 13 Koperasi Pekerja Jaya Berhad 36,195,376 14 Koperasi Kewangan Perindustrian Malaysia Berhad (MIFC)* 31,967,449 15 Koperasi Pegawai-pegawai Melayu Malaysia Berhad (MOCCIS) 29,489,053 16 Koperasi Usaha Bersatu Malaysia Berhad (KUB) 28,391,406 17 Koperasi Telekom Malaysia Berhad 27,411,306 18 Koperasi Lembaga Letrik Negara Berhad 26,243,534 19 Syarikat Nesa Pelbagai Berhad 25,271,004 20 Koperasi Belia Nasional Berhad (Kobena) 23,685,414 N.B. * hit by the 1986 freeze

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Earlier on, amidst the atmosphere of doubt and trepidation, in February 1986, the authorities had begun probing into some DTCs.33 In early July 1986, C24, the largest cooperative with 67 branches and nearly 53,000 depositors, suspended payments. Feeling that the confidence crisis was getting out of hand, the government decided to introduce the Essential (Protection of Depositors) Regulations, 1986 – promulgated on 20th July – under the Emergency (Essential Power) Act, 1979, to give the Central Bank the necessary authority to act upon certain deviating DTCs. With these additional powers, the Central Bank launched a surprise raid on C24 and its subsidiaries on 23rd July 1986 and suspended their activities. It proceeded to submit a report to the Prime Minister and the Minister of Finance on 31st July 1986 on the raid on C24 and the financially tenuous state of the DTCs in general and informed the Registrar-General of Co-operatives on 5th August 1986 that a number of the DTCs were unable to meet deposit withdrawals and were considering closure. Nevertheless, the action against C24 appeared to be somewhat late in coming. Confidence was not restored, and a run on other DTCs had begun. A decision was subsequently made on 6th August 1986 that in addition to C24, the activities of 23 of the 35 DTCs34 should also be suspended. The Freeze

On 8th August 1986 the activities of the 23 cooperatives were suspended. The assets of 136 of their directors and main office-holders, who were also required to surrender their passports to the Director of Immigration, were frozen. Investigations were subsequently launched with the assistance of 17 accounting firms specially appointed for the purpose.35 Table 14 Malaysia: DTCs Suspended, 1986 #

C1 Koperatif Serbaguna Malaysia Berhad (KSM) Malaixiya Duoyuanhua Hezuoshe (Mahua)

C2 Koperasi Pembangunan Ekonomi Pemuda Malaysia Berhad (Komuda) Malaixiya Qingnian Jingji Fazhan Hezuoshe (Qingjing)

C3 Koperasi ENE Berhad (ENE) * Wan Hezuoshe (Wan)

C4 Koperasi Serbaguna Fortiss Berhad (Fortiss) Fuli Duoyuanhua Hezuoshe (Fuli)

C5 Koperasi Serbaguna Gunung Emas Berhad (KGE) Jinshan Duoyuanhua Hezuoshe (Jinshan)

C6 Koperasi Kewangan Perindustrian Malaysia Berhad (MIFC) Malaixiya Shiye Jinrong Hezuoshe (Shiye)

C7 Koperasi Serbaguna Kosmopolitan Berhad (Kosmopolitan) Dazhong Duoyuanhua Hezuoshe (Dazhong)

C8 Koperasi Mewah Berhad (Komewah) Meihua Hezuoshe (Meihua)

C9 Syarikat Kerjasama Penjaja-penjaja dan Peniaga-peniaga Kecil Selangor Berhad (Sakapp) Canhe Hezuoshe (Canhe)

C10 Koperasi Rakyat Berhad (Korakyat) Renmin Hezuoshe (Renmin)

C11 Koperasi Bersatu Tenaga Berhad (Kotena) Malian Hezuoshe (Malian)

C12 Koperasi Jayadiri Malaysia Berhad (Kojadi) Mahua Zili Hezuoshe (Zili)

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C13 Koperasi Pengusaha Teksi Wilayah Berhad (Koteksi) Mada Gongshang Hezuoshe (Mada)

C14 Koperasi Jasa Rakyat Berhad (Kojasa) Fulian Hezuoshe (Fulian) **

C15 Koperasi Wanijaya Malaysia Berhad (Wanijaya) Malaixiya Funü Tuanyun Hezuoshe (Futuanyun)

C16 Koperasi Sepadu Berhad (Sepadu) Huilian Hezuoshe (Huilian) ***

C17 Koperasi Emas Pulau Pinang Berhad (KEPP) Jinma Hezuoshe (Jinma)

C18 Koperasi Serbaguna Leasing & Kredit Malaysia Berhad (KLK) Malaixiya Xindai Hezuoshe (Xindai)

C19 Koperasi Sri Maju Berhad (Komaju) Yulong Hezuoshe (Yulong)

C20 Koperasi Wartawan-wartawan Berhad (Wartawan) Renren Hezuoshe (Renren)

C21 Koperasi Pantai Kembang Berhad (Pantai Kembang) Penglian Hezuoshe (Penglian)

C22 Koperasi Sakthi Jaya Berhad (Sakthi Jaya) Wanren Hezuoshe (Wanren)

C23 Koperatif Bersatu Berhad (KBB) Tongyi Hezuoshe (Tongyi)

C24 Koperasi Belia Bersatu Berhad (Kosatu) Qingnian Tuanjie Yundong Hezuoshe (Qingtuanyun) **** N.B.: # In the Chinese community, these cooperatives were known by their Chinese names (in italic).

“Hezuoshe” is a cooperative while “duoyuanhua” means “multi-purpose”. See also notes 4 and 5.

* “ENE” stood for “Empat Nombor Ekor” (four-digit betting), the former name of Magnum. This cooperative was a ticket-sellers’ cooperative of Magnum.

** “Fulian” is short for “(Malaixiya) Fujian Shetuan Lianhehui” (Federation of Hokkien Associations in Malaysia). “Hoklian” as in “Hoklian Holdings Bhd.” is the pronunciation of “Fulian” in the Hokkien (Fujian) regionalect.

*** “Huilian” is short for “(Malaixiya) Huizhou Shetuan Lianhehui” (Federation of Fui Chiu Associations of Malaysia). “Fui Lian” as in “Fui Lian Holdings Bhd.” is the pronunciation of “Huilian” in the Hakka (Kejia) regionalect.

**** “(Malaixiya) Qingnian Tuanjie Yundong” is Chinese for “Gerakan Belia Bersatu Malaysia” (the Malaysian Youth Solidarity Movement).

Although not all directors, members and depositors in these DTCs were Chinese, the number of non-Chinese was relatively quite negligible. Hence the crisis could be said to be mainly a Chinese crisis, and it in particular hit those in the lower-middle- and lower-income classes.36 Hence, the most important aspect of the crisis was that more than half a million Malaysians, mostly working-class Chinese, had lost their money – in some cases, their entire life savings – in the ailing DTCs.37 The government’s initial decision not to bail out the DTCs caused much hue and cry38, including demonstrations, from the depositors, whose dearth of political leverage was probably more than compensated by their numerical strength - half a million, not counting as

32

many as two million of their dependents.39 Not till early July 1987 did the Central Bank at long last announce a bail-out plan40, approved by the cabinet, for the DTCs with full compensation for the depositors – albeit spread over five years, either in cash or in shares of newly licensed successors to defunct companies.41 Conclusion: Communal Corporatization or Corporate Communalism?

The 1986 upheaval in the Malaysian corporate sector, while sending shock waves across the nation, has its impact most acutely felt in the Chinese community. The unprecedented event that centred around H34’s misadventure and the DTC (deposit-taking cooperatives) fiasco that served as a grand finale to the vicissitudes of the Malaysian Chinese communal corporatization movement, by close scrutiny, was linked to the community’s haste to modernize its economic structure, through the said movement that aimed at pooling the community’s hitherto scattered resources, much of which idly tied up in the 4000 or so communal associations and trade guilds. Just passing the 20th anniversary of the episode, this paper has reviewed the unfolding of the tragedy, examined the major factors behind the debacle, scrutinized the identity of the communal organizations that sponsored the ill-fated movement, and analyzed the role of corporatization as an ethnic revival movement. This was done in the light of the community’s semi-capitalistic economic structure, which is deeply rooted in the arduous process of development of the early migrant society, stylized by clan mentality and bang spirit amidst a complex web of traditional guilds and associations.42

In short, what we witnessed in those turbulent days of 1986 is how communal politics penetrated an economic revival movement and gave rise to a new phenomenon of corporate communalism, and how diasporic dilemma in the form of communal insecurity and vulnerability in the face of the onslaught of State-sanctioned racialist preferential policies had propelled the community to perceive capital mobilization as ethno-(re)genesis or ethnic reawakening – a foredoomed measure fraught with structural contradictions.

Notes 1 For the “new realism” brought forth by the NEP, and the concept of “ethnic democracy” or “coercive consociationalism” as a regime type, see Yeoh (2003a: 91, 96). 2 Country experiences show that while government responds to challenges from ethnic community organizations that seek to influence public policy, within an inverted and complementary paradigm, ethnic communities do take shape in response to public policy stimuli, which induce a process of ethnogenesis or reethnicization that further influences public policy formulation (Yeoh, 2003a: 110-112). 3 Besides the secret societies, the triumvirate of Chinese regionalect, place-of-origin (e.g. province/county/district) and family-clan (surname) associations has always constituted a distinctive feature of the organization life in Southeast Asian ethnic Chinese societies. During colonial time, even the rival secret societies were often, though not always, organized along regionalect lines. Somers Heidhues (1974) noted the heterogeneity of the Chinese population as an important factor that have favoured the establishment of regionalect associations:

In nineteenth century Java, the almost solidly Hokkien settlements had no reason to organize by speech group; only when the Chinese minority became more heterogeneous was there an impetus to form such associations. The hui-kuan or gremio of the Chinese in Manila was transformed into a Hokkien speech group organization when the tiny Cantonese-speaking group (perhaps 5 per cent of all Chinese in Manila) formed an association of its own. Not surprisingly, the first speech and district associations came on the scene relatively early in Singapore, with its mixed bag of recent immigrants.

(Somers Heidhues, 1974:49-50)

The same, to a certain extent, can be said with regard to the formation of place-of-origin (locality) and family-clan (surname) associations. Long engaged in welfare activities, recreation, burials, ancestor worship, organization of festival processions, management of cemeteries and temples,

33

unofficial regulation of disputes including criminal cases, and even the founding of schools, these communal associations were the overt, legal complement to the secret societies as well as the latter’s competitor for power over the Chinese immigrant society. Later, with the suppression of the secret society by the colonial governments, such legal communal associations grew to assume the legitimate functions once served by these proscribed societies. More de facto than de jure, the Chinese associations had come to be the “Guardians of the Diaspora”. 4 “Mahua Hezuoshe” in Chinese (“Hézuòshè”, a cooperative. Later, the directors of the DTCs accused of corruption and breach of trust were ridiculed as “hézuòshé”, alliteratively punned with the term “hézuòshè”. “Shé” is Chinese for “snake”). 5 “Mahua Konggu” (“Kònggǔ”, a holding company. Later, the communal holding companies were ridiculed as “tòngkǔ” – meaning “pain, agony” – an assonantal punning with the term “kònggǔ”). 6 Apart from many small associations that are more like recreation clubs in nature – nothing more than a sort of club building at which members can spend their leisure hours, whether it be reading newspapers or playing mahjong (this is a common observation confirmed by the author’s personal visit to many such associations, especially the smaller ones), Chinese associations can be classified into various categories – which may range from six to thirteen (see Cheng, 1985; Liu, 2005; Wen, 2005) – based on different criteria. According to Cheng, Chinese associations can essentially be classified into six major varieties, viz. those based on locality/regionalect, on clan/surname, on trade/occupation (guilds), mutual help, recreational/cultural/athletic/alumni, and religious (Cheng, 1985:35). They can alternatively be grouped for convenience into 5 types: clan associations (based on locality, regionalect, clan or surname), trade guilds (Chinese entrepreneurs), chambers of commerce (mainly with guilds and Chinese-owned business concerns as members), alumni associations and religious societies. Cheng attributed the proliferation of such associations to the need for social control, mediation, religious worship as well as welfare services, which is important in the absence of a protecting authority in the early days. T’ien (1953) said this regarding the origin of these traditional associations in Malaysia:

When a Chinese leaves his homeland and comes to this part of the world, he tends to mix with those whose speech he can understand, to travel with them and stay at hotels owned by them. He tends to serve his apprenticeship in his new country in the occupation in which a majority of his own dialect speakers are found, and having served his apprenticeship he tends to stay in the same trade all his life. When he opens a business he seeks a partner of the same dialect group, and employs his assistants likewise. He likes to marry a girl who speaks his dialect, and when he dies he is carried to the cemetery where others who spoke as he did already lie buried. … The existence of so many organized associations in the overseas Chinese communities points to the existence of numerous social groups. 7 The speakers of many of the Chinese regional languages are simply too numerous for the word “dialects” to be used as an appropriate term to designate their languages. For instance, the number of speakers of either Cantonese (Yue 粤) or Hokkien/Fujianese (Min 闽) is larger than the number of speakers of either Polish or Ukrainian, the two East European/Slavonic languages with most numerous speakers except Russian, or the speakers of Dutch, Danish, Norwegian and Swedish combined. En passant, the modern Chinese lingua franca is Mandarin, which is actually the Western name for Huayu, the Chinese Standard Vernacular known in China as “putonghua” and in Taiwan as “Guoyu” (“Kuo-yu”). The term “Mandarin”, via Portuguese “mandarim”, has an obscure origin in Sanskrit “mantrin” (Hindi “mantri”, Malay “menteri”). It is not part of the Chinese vocabulary and often ridiculed by the Chinese as having been derived from “Man daren”, i.e. a “Manchurian minister”. 8 “Renren Hezuoshe”. 9 In Malaysia (formerly Malaya), the prevalence of interethnic marriage in the early days had resulted in the emergence of the "Straits Chinese" or "Baba" community, in the absence of the present legal requirement for the conversion of the non-Muslim partner in an interethnic marriage. In the Philippines, it is a well-known fact that the former president Corazon Cojuangco Aquino is a fourth-generation Chinese of the Cojuangco clan – whose lineage can be traced back to the family patriarch 许玉圜 Xǔ Yù-Huán (许 being the surname from which the initial “Co” was

34

derived, 圜 gave “Juang”, and the final “co”, i.e. 哥 gē, means “brother” – a term of reverence). Cardinal Jaime Sin (i.e. the surname 沈 Shěn) is also of Chinese descent. In his 1970 study of Thanom Kittikachorn’s second cabinet, Kawabe Toshio found that twelve (i.e. 63 per cent) of the nineteen ministers of that Thai cabinet were of Chinese descent, with the original Chinese family names and regionalect origins known for five:

Thai name Portfolio Chinese family name Origin Thanom Kittikachorn Premier cum Defence 符 Fu Hainan Pote Sarasin National Development 黄 Huang Hainan Thanat Khoman Foreign 柯 Ke Hakka Sunthorn Hongladarom Economy 林 Lin Teochew Prasert Ruchirawongse Internal (deputy) 陈 Chen Hainan

Kawabe also found that 161 (i.e. 62 per cent) of the 260 members of the sapha lan rattamanun (constitutional council) were of Chinese descent, with the original Chinese family names known for 78 (i.e. 30 per cent). (Kawabe, 1972: 15-16, see Song, 1983) 10 The “Nian” were mainly bankrupt peasants and drifters, active in Anhui, Henan, southwestern Shandong and northern Jiangsu, who started an insurrection after people were left destitute following a Yellow River flood in the area in 1851. 11 Massive Chinese emigration had actually begun much earlier with the conquest of China by the Manchus, giving birth to Cholon (the sister town of Saigon – now Ho Chi Minh City), the world’s largest Chinatown after Singapore, before the fall of Saigon in 1975 to the forces of the North Vietnamese and their southern allies. Cholon, the “Big Market”, was founded by Chinese refugee migrants, who descendants were today known as the “Ming Huong”. (Ly, 1978: 32-44) 12 Such was the origin of the English verb “to shanghai” (to blackmail, kidnap) and the idiom “a Chinaman’s chance” (i.e. no chance at all). 13 “Qundaifeng 裙带风”, or its more modern manifestation – “guanxi 关系”. 14 The Multi-Purpose chief, later president of the ethnic Chinese component party in the ruling coalition, himself is a Hainanese. 15 Incidentally, Huang’s observations were reproduced almost verbatim in an article published in a local tabloid, 华商报 (Wah Seong Press), on 20th October 1981. 16 There were 7937 such associations registered with the Malaysian Registrar of Societies as at the end of 2004 (Liu, 2005: 24). 17 A zhonghua dahuitang 中华大会堂 or huaren dahuitang 华人大会堂 is normally called “Chinese Assembly Hall” (in Kelantan, Terengganu, Selangor and Negeri Sembilan), but also variously known as “Chinese Association” (Perak), “Chinese Town Hall” (Penang), and “Federation of Chinese Associations” (Sarawak and Johor). 18 There were sixteen such nationwide confederations of various clan-regionalect and family-name associations (see Table 3), according to the 1984 Malaixiya Shetuan Mingce 马来西亚社团

名册 (Directory of Malaysian Societies). 19 There were nineteen such nationwide confederations of trade guilds and associations, according to the 1984 Mingce. 20 “Moral Uplifting Society” is the normal registered name of a dejiaohui 德教会 (a religious mutual help society). These Dejiao Societies are the only traditional Chinese religious societies notable in Malaysia in the context of this paper. Dejiao (de: moral, morality; jiao: teaching, religion), apparently under the direct influence of the popular Dao (Taoist) religion (vis-à-vis the original contemplative Dao philosophy of Lao Zi), was founded in 1939 by Yang Ruide of the Chaoyang prefecture in China, reportedly with revelations from the deities Yang Songyun and Liu Chunfang. Dejiao’s initial functions included the propagation of traditional moral values, the provision of free medical services for the desolate Chinese folks during the war-torn epoch. This characteristic of a charity and welfare organization persists till today. Initially the religion worshipped Lao Zi (Lao-tse), the founder of the contemplative Dao (Taoist) philosophy. Later, Kong Zi (Confucius) was added. As the pantheon expanded, Dejiao gradually evolved into a syncretism of Taoism, Confucianism and Buddhism, and later even Islam and Christianity were brought into the fold. Its

35

concept of the unity of diverse religions is in some way similar to that of the well-established religious reformist movement of Baha’ism or the Cao Dai religion of Viet Nam. However, the Dejiao religion has never been properly developed and its theology and philosophy are at best rudimentary and characterized by superstition, idolatry and the mystical practice of trances. (Cao Dai is of course much better organized than Dejiao, but its survival, like other native religions of Viet Nam such as the Phat Giao Hoa Hao, under the communist regime is doubtful.) In 1944, Dejiao adopted Daode Yishi, a modified version of Lao Zi’s Daode Jing (Tao Te Ching), as its holy scripture, thus reaffirming the special status of Lao Zi in its pantheon. Dejiao was introduced into Malaya in 1954. Within three decades about 60 religious centers were set up in over forty towns throughout the country (Zheng, 1981). Twice, in 1967 and 1971, decisions were made to abolish the practice of trances and to secularize the Dejiao societies but to date these have yet to be implemented by all Dejiao societies (see the commemorative issues of the 24th anniversary of the establishment of the Federation of the Moral-Uplifting Societies in Malaysia, of the Malaysian Chinese dailies 星洲日报 (Sin Chew Jit Poh), 3rd January 1982, and 星槟日报 (Sin Pin Jih Poh), 9th January 1982). 21 The duties of these chambers of commerce were minutely prescribed by the said Ministry of Agriculture and Commerce, including such items as: consulting about industrial and commercial reforms; furnishing information to officials about commercial and industrial questions; settling industrial and commercial disputes at the request of interested parties; and, being responsible for maintaining order when there is a money panic. The establishment of the chambers of commerce greatly affected the functions and operations of the commercial guilds. In Peking (Beijing), the formerly isolated commercial guilds had become more interrelated as an inclusive group, with a larger programme and interest, while the power of the chamber of commerce steadily grew over the activities of local guilds. Taxes were paid through the chamber of commerce. Inter-guild disputes, formerly settled by informal groups of neutral guildsmen, now went to the chamber of commerce court. Contests with the officials, formerly waged by each small organization independently, were now carried out by this union of all traders of the city. In addition, the local chambers of commerce were related to the provincial and national organizations, thus resulting in the breaking up of localism and petty interests of the original commercial groups. The chamber of commerce movement was thus expanding the horizons of those involved in commerce and gradually creating among the commercial guilds a provincial and national outlook where formerly there existed only local interest. 22 See the 1974 Mahua Shanghui Shi 马华商会史 (History of Chinese Chambers of Commerce of Malaysia), p. 9. 23 Public opinion gave various factors contributing the failure of the movement and these are listed in this section. These factors – parochialism and broad-based shareholding structure, association mentality and board composition, limited business portfolio and over-cautiousness, conflict of interests – are summarized from articles in the newspapers and newsmagazines as listed in the second section of the references. 24 To save space, henceforth the holding companies and deposit-taking cooperatives will be referred to by their alphanumerics in Table 6 and Table 14. Grand United Holdings Bhd, a former associated company of the Grand Ocean (H29), which later fully owned the latter, is given the alphanumeric H29a. 25 One of H29’s directors was a brother of the president of the ethnic Chinese component party in the ruling coalition. At the unfolding of the Pan-El scandal, H29a, together with the other companies in president’s economic empire, was suspended from trade in the Stock Exchange. 26 The board would usually go for the low-risk and hence low-return activities, according to some critics, probably to avoid being blamed in case any investment failed. There was thus by and large a lack of driving force among the first generation directors in making corporate decisions. In addition, another reason for the perceived lack of dynamism and interest among board members of these companies might be that many of these directors were merely “stewards” in status as they did not hold much equity interest in such companies that consisted mainly of small shareholders. As such, the boards of these companies tended to adopt an over-cautious

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approach in discharging shareholders’ money rather than having to bear any responsibility in the case of an investment failure. 27 Nevertheless, the objectives of a community investment holding company did not always coincide with those of the other business set-ups. Hence, there were times when these holding companies were expected to enter into a deal that put “the interests of the community at large” above those of the shareholders, it was sometimes argued. In terms of business portfolios, these holding companies that were variously related to political parties, associations and guilds appeared to be rather similar to one another. Investment-wise, it is interesting to underline the relationship between H34 and these state-level holding companies. Generally, H34 was required to take a 10 per cent equity interest in each of the companies while they were in turn encouraged to invest in H34 or its related companies. There had been several deals involving the buying of each other’s assets between H34 and its “sister” state-level holding companies. 28 This review of the unfolding events surrounding the DTC fiasco takes a cut-off date at around February 1987. Data and information on DTC investigations and court cases are from the government White Paper tabled in Parliament on 10th November 1986 (Report on the Deposit-taking Co-operatives and Investigation Report on Twenty-four Deposit-taking Co-operatives – lampiran kepada Laporan Mengenai Koperasi-koperasi Pengambilan Deposit) and newspapers and newsmagazines as listed in the second section of the references and taken as reported. Most of such cases involved fraud, conflict of interests and criminal breach of trust (CBT). There were, for instance, cases of loans and advances given out to the directors of cooperatives (sometimes without any form of collateral or fixed terms of payment) and to individuals related to the chairmen of the board, to family members and relatives, employees and business associates, etc. There were also cases in which funds were embezzled by branch office managers, and lands owned by directors were sold to the cooperatives at inflated prices. To save space, the deposit-taking cooperatives will be referred to by their alphanumerics in Table 14. 29 Setia Timur (“Dongcheng” in Chinese). 30 C24 deserves particular attention due to its special role in the 1986 crisis. It was this cooperative that had been accused by the public/media as the number one culprit in the cooperative disaster and the accusation tended to zero in on its founder-chairman (see newspapers and newsmagazines as listed in the second section of the references). 31 It did so under the banner of the Qingtuanyun Movement (see notes to Table 14). 32 Source of data: Nanyang Siang Pau, 8th July 1986. 33 On 8th May 1986, the Koperasi Kawalan Kredit (KKK), a regulatory body designed to oversee the DTCs, was registered. Unexpectedly, rather than strengthening the confidence of the depositors, the setting up of the KKK had brought about the exactly opposite effect of eroding the already measly confidence. Due to the fact that not all DTCs automatically became members of KKK, there arose public misunderstanding concerning those non-members. This resulted in a further confidence crisis and a bigger run on the DTCs. By the time all DTCs were accepted as KKK members, the crisis had gone out of control. By then, C24 had even failed to meet normal withdrawals. 34 The 35 DTCs had 1.045 million members and approximately RM4 billion in deposits. 35 Even so, by the time the assets of the 23 DTCs, in addition to C24, were frozen and a full-scale investigation was launched, RM150 million had already dissipated. 36 Many of these cooperatives had strong Chinese communal background, like C1 and C12 established by the MCA, C8 by the Federation of Kheng Chew Associations of Malaysia (Hainanese), C9 by the Selangor Hawkers and Petty Traders Association, C10 by Parti Gerakan Rakyat Malaysia, C13 by the Federal Territory Taxi Association, C15 by the women wing of the MCA, and C24, at least nominally, by the Malaysian Youth Solidarity Movement (GBBM). C2, set up by the Chinese-based Malaysian Youth Movement, on the other hand, was related to the MCA Youth. C14, though established by the Eurasian community, was later largely run by the Youth section of the Federation of Hokkien Associations of Malaysia. C20, set up by the Journalists’ Association, was taken over by the Chung Ling Old Boys’ Association. A note on C9: C9 was the cooperative counterpart of the ill-fated H8. Nevertheless, while the holding company was mainly Johor-based, the cooperative’s membership was open to all hawkers and petty traders in Selangor. The following are reported in the Government White Paper tabled 10th November 1986

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and newspapers and newsmagazines listed in the second section of the references. Included in its loans to members were allegedly loans to directors of the cooperative, their family, business associates of directors, companies and projects controlled by the directors of the cooperative. In particular, it was alleged that a total of RM11.9 million (28.1 per cent of total assets) was due from a director of the cooperative who was the central figure in the scandal, his family, his business associates and company owned by him and a former director and their family, as at 8th August 1986, and an amount of RM1.1 million was advanced to projects (owned by the director and former directors) included in other debtors. The loans granted to the nominees of the said director had the following defects: 10 borrowers did not have a loan agreement; 20 borrowers did not hold the required number of shares in the society; 4 borrowers could not be located; 25 borrowers did not have a guarantor. Later evolvement of the event would see the said chairman of the cooperative pleading guilty to two charges of criminal breach of trust amounting to RM1,167 million. The cooperative’s secretary and its former chairman and adviser (former Deputy Minister in the Prime Minister’s Department) were both charged with abetting the said chairman to commit CBT of RM1.671 million. A note on cooperative’s holdings counterpart: At its inception, with the assistance of its adviser (the H34 chief later jailed in Singapore for the Pan-Electric scandal) and its honorary chairman (former chairman of the ethnic Chinese component party in the ruling coalition), the holding company was allotted 500,000 H34 shares in order to be able to collect 1,000,000 shares for registration.. The holding company’s managing director (who was also a director of another Batu Pahat-based holding company – no. 11 in Table 6) later committed suicide after the debt-ridden company’s failure in performance. An honorary adviser of the company, who was the Youth chief of the party, was later arrested in February 1987, alleged to have committed CBT of RM1.9 million belonging to a cooperative related to the Youth wing of the party (no. 2 in Table 14), following the DTC crisis of 1986. The H34 chief, who was to become president of the party, was later sentenced to a two-year jail term in Singapore after being charged with 15 counts of financial offences involving RM21 million in the Pan-Electric scandal. A note on MCA Youth: The following are reported in the Government White Paper tabled 10th November 1986 and newspapers and newsmagazines listed in the second section of the references. The Youth chief of the ethnic Chinese component party in the ruling coalition (the cooperative’s chairman) and the Deputy Minister of Culture, Youth and Sports who was also a Central Committee member of the party (the cooperative’s treasurer) were arrested on 17th February 1987. Also arrested were two other officials of the DTC – its secretary and its vice-chairman. Their arrest came in the wake of a police report filed by Bank Negara of transactions showing a conflict of interest regarding some of cooperative’s directors and 3 reports filed by depositors. The government White Paper had highlighted the fact that cooperative had entered into an agreement with a holding company to purchase 40 million shares in a listed corporation where the Youth chief of the party was the chairman for RM34.36 million or 85.9 sen a share, compared with the prevailing market price then of 52 sen. The Youth chief of the party had joint control of said holding company. The cooperative was also said to have given an advance of RM1 million to the said H34 chief to purchase shares in H29a. The White Paper further pointed out that the cooperative had given loans of RM3.35 million and RM3.07 million to the said Youth chief’s brother-in-law and his cousin. The police report filed by the cooperative’s depositors alleged that the Youth chief had sent out large sums of money overseas so that they were not within reach of the Malaysian authorities. They also referred to 2 occasions in which the cooperative had purchased an ice-cream factory and a piece of land in Penang from companies in which the Deputy Minister of Culture, Youth and Sports was alleged to have an interest. The Youth chief, the Deputy Minister of Culture, Youth and Sports and the other two officials of the cooperative were charged in the Sessions Court in Kuala Lumpur on 18th February 1987 with CBT of RM3.3 million of the cooperative’s funds. Their passports were also impounded by the court. 37 On the part of the DTCs, the response to the Central Bank’s swingeing measures had been ambivalent. Some DTCs were clearly outraged that the suspensions forestalled their plan to establish a consortium of 26 cooperatives to save C24. Anyway, time was obviously not on their side. It ran out for the Central Bank as well. Moreover, although the authorities kept emphasizing that the cooperatives were not part of the banking system, three or four finance companies were

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reported to have come under pressure from depositors wanting to withdraw their money. There was also much unease within the financial circles regarding some latent danger due to the volume of the DTCs’ deposits with the finance companies or the amount of banks’ unofficial loans to the DTCs. A note on C24: C24 had, at the time of the crisis, 67 operating branches throughout West Malaysia, with 14,541 members, and appeared to have 19 subsidiary companies. The following are reported in the Government White Paper tabled 10th November 1986 and newspapers and newsmagazines listed in the second section of the references. The cooperative, though set up in the name of the Chinese-based Qingtuanyun (GBBM), was the business empire and largely a brainchild of GBBM’s “life”-president who also managed to acquire the position of the president of the People’s Progressive Party (PPP) – a minor partner in the ruling coalition, after the faction tp which he belonged lost out in the power struggle within the ethnic Chinese component party in the ruling coalition. The cooperative was principally engaged in the business of deposit-taking from members and the public at large. Deposits amounted to approximately RM156.1 million, collected from about 52,000 depositors. The Bank Negara investigators noted that the accounting records and books of the cooperative and its subsidiary companies were generally unreliable. They noted numerous instances of material discrepancies in the draft management accounts, inaccurate entries in the accounting records and significant unreconciled differences that might have to be written off. This was complicated by the involvement of its president (the abovementioned president of GBBM and PPP) in various significant personal transactions with the cooperative and the apparent absolute control he had over the operations of the cooperative and its subsidiaries. He was chairman of the cooperative until his resignation on 17th July 1986. The investigation alleged that the cooperative’s loans to him including interest totaled RM3.1 million. In addition, he was alleged to have obtained informal interest-free advances from the cooperative accumulated to RM2.9 million through the beginning of 1986; of this, approximately RM1.3 million appeared to have been repaid by way of personal properties injected by him, and there was no evidence in the executive committee minutes of professional independent valuations or his declaration of interest in those transactions, as reported in the government White Paper and newspapers and newsmagazines as listed in the second section of the references. Besides, it also appeared that 17 companies were controlled by certain directors of the cooperative. Interest-free loans and advances, with no fixed terms of repayments and no security, totaling RM3.6 million were allegedly outstanding to these companies at 23rd July 1986. He later pleaded guilty in the High Court on 12th November 1986 to CBT involving about RM1 billion of the cooperative’s money between 2nd May and 7th October, and was sentenced to 12-years’ jail. 38 The leader of the Chinese-based opposition Democratic Action Party (DAP – “Minzhu Xingdong Dang” in Chinese), protested, accusing the government of evading its responsibility to the people, since in the past, it had rescued Bank Rakyat, Bank Bumiputra and other companies that linked to the interest of the demographic majority. 39 As a local newspaper succinctly reported: Patience was indeed wearing thin. Initial frustration on seeing their trust betrayed and their hard-earned savings frozen by fiat soon turned to misery and anger when depositors discovered that financial shenanigans by the directors and officials had withered away their deposits. One C9 depositor had committed suicide because he could not get back his money. A C24 branch manager in Kluang fled his home to escape the wrath of depositors. A branch manager of a DTC took his own life after being accused as a swindler by depositors. Hundreds of depositors in C4 stormed the cooperative’s headquarters in Kuala Lumpur. At least 15 of C24’s branch managers all over the country took shelter at the cooperative’s headquarters in Kuala Lumpur for fear of abuse by the depositors. (Star, 18th December 1986) 40 This bail-out plan not only brought relief to the 588,000 people who had deposited RM592 million to RM1.5 billion into the 24 cooperatives, but also to the leaders of the major Chinese political party in the ruling coalition who saw a potentially explosive political furore mitigated. As a political issue, the DTC fiasco was perfectly designed for the party’s opponents both inside and outside the ruling coalition. The party’s chief rival in the coalition, Gerakan, in fact also came up with a rescue plan in May that contained the outlines of the bail-out plan eventually adopted. While the plan was blessed by the dominant member of the ruling coalition, whose slow response

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to the problem had been criticized as being in sharp contrast with earlier calls for action to rescue troubled institutions linked to the country’s demographic majority, by then the beleaguered party, with its political credibility having taken a nosedive, had warned of pulling out of the ruling coalition if an immediate ringgit-for-ringgit refund was not guaranteed. A note on Gerakan: Parti Gerakan Rakyat Malaysia or “Malaixiya Minzheng Yundong” (or “Minzheng Dang” in short) in Chinese. In an obvious attempt to remain consistent in its criticism of its rival for mixing politics and business, senior leaders of the this party were not involved directly in the running of C10, established in 1981. This was indeed a wise step by hindsight, in view of the 1986 crisis. Though C10 was one of the 24 DTCs suspended, the party was spared the wrath of depositors. Its rival was not so fortunate. 41 Star, 7th July 1987. The following are reported in the Government White Paper tabled 10th November 1986 and newspapers and newsmagazines listed in the second section of the references. It was believed that the fury simmering in the depositors engendered by this betrayed trust would eventually hit the ethnic Chinese component party in the ruling coalition hard. It is impossible to avoid taking note that this major Chinese political party in the ruling coalition was widely perceived to be connected with the DTCs, taking into consideration the number of party leaders at all levels connected with the troubled cooperatives – from president down to branch leaders, from directors down to officials actually manning these DTCs, as the media never failed to observe, they were almost all from the party. Both the Bank Negara and the Ministry of Finance had been criticized for having waited more than three weeks after the initial raid on C24 before suspending the other 23 DTCs. The timing is interesting. A general election had been called at around that time, and nomination day was held on 24th July 1986 – one day after Bank Negara had been forced to move against C24. Six of the 136 directors and office bearers who had originally been on the list of those whose assets were to be frozen stood as parliamentary or state-assembly candidates for the ruling coalition. The original list of 136 affected directors and office-bearers included such figures as the ethnic Chinese party’s deputy secretary-general and Deputy Minister of Finance and two other fellow party heavy-weights, who were listed as directors of two cooperatives, C1 and C12. The then party president, who was later jailed in Singapore for the Pan-Electric scandal, was also on the list as a director of C12. However, he issued a statement claiming that he had resigned from that post on 28th January 1986. Bank Negara then made several deletions from the list that not only cleared the party president, but also the party’s deputy secretary-general and Deputy Minister of Finance, the party’s women’s wing chairperson and Health Ministry parliamentary secretary, women’s wing secretary-general and another central committee member of the party. Two prominent party officials then still being investigated were the former Deputy Trade and Industry Minister and the party’s Youth chief and the Deputy Youth, Sports and Culture Minister (the party’s national organizing secretary), both having involved with C2. Besides C1, C12 and C2, the party was also involved with C17, headed by a former Penang state executive councillor. The women’s wing chief was a director of C15. Apart from the five DTCs that had direct links to the party through their directors, a further four cooperatives were linked in news reports in March 1986 with a failed bid by the party’s president to honour his forward contracts in Singapore through an obscure subsidiary of his H29a. At least three more DTCs linked to the party, besides C1, had been found to be financially troubled, according to the White Paper on the DTCs released by Bank Negara. They were C2, C13 and C15, the last run by some of the party’s women’s wing leaders. C2, chaired by party’s Youth chief, was said to have more than 40,000 depositors and was in the red for more than RM24 million. A case of purchase of shares in a company owned by him using C2 depositors’ money at a price allegedly higher than market value was documented by the White Paper. C13, whose chairman was an activist in the H34 chief’s faction during the party’s crisis, suffered a loss of RM3.1 million. There were alleged controversial loans and advances made by these cooperatives to their chairmen/directors and their relatives. Another DTC, C16, chaired by a former senator from the party, suffered a loss of RM10.6 million. The former senator – said to be a former close associate of the party’s deputy president and several other party leaders – was arrested twice after the freeze, facing possible CBT. Some 30 per cent of C16’s loans were to directors, directly and indirectly. The chairman of C24 and the president of the PPP, who was convicted of CBT in connexion with C24 and sentenced to 12-years’ jail, was an activist of the said ethnic Chinese component party in the

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ruling coalition until the previous year, 1985. While C24’s records showed that the single largest borrower was a Sarawak timber tycoon who obtained a loan for RM6 million in January 1986, several grassroots leaders of the party allegedly also obtained loans from the cooperative. The party’s former organizing secretary who was then also a senator took a RM30,000 loan in 1984. She had initially serviced only the interest and C24 had since classified the loan as non-performing. The former Federal Territory Youth leader of the party secured a RM200,000 loan from C24 in 1985. He later said that the loan was secured with a piece of property. A former central committee member of the party borrowed a total of RM178,000 from C24 on 2 occasions in 1984. He had repaid part of the total amount but C24’s records showed that he still had RM98,000 outstanding as of June 1986. There were other developments involving the party. There was the case of Perak chairman of the party being sued by investors for alleged fraud in the formation of a “holdings” company set up to tap funds from the general public for investment. Then there was this former secretary-general of the party and Deputy Minister in the Prime Minister’s Department under trial for alleged financial crimes. All these were in addition to the fact that the party president, once hailed as the “economic saviour” of the Chinese community, was in jail in Singapore on 15 counts of financial offences involving RM21 million in the Pan-Electric scandal. En passant, the also Chinese-based chief rival of the party’s in the ruling coalition also had an associated cooperative C10 (headed by its former Perak party chief) and it was noted that loans totaling RM8.2 million were allegedly made to its directors and directors of interested companies, as reported in the government White Paper and newspapers and newsmagazines as listed in the second section of the references. 42 There are various factors widely attributed by the local news media (see newspapers and newsmagazines as listed in the second section of the references) to the phenomenal rise and fall of these DTCs. From the angle of tradition, there are historical reasons for the DTCs’ popularity and rapid growth among the Chinese. The traditional practice among the Chinese to entrust their savings to towkays, guilds, and cultural associations goes far back to the days when the first Chinese immigrants came to work in the tin mines of Malaya. Thus, it is no coincidence that those heading the DTCs were community leaders with popular support. The towkays were unofficial bankers during those pre-war days. The workers often asked the towkays to keep their money for them. The money was withdrawn when the workers needed it to make a trip back to China or to celebrate the Chinese New Year. The patron-client relationship was reinforced by the fact that the towkays acted as peacemakers in quarrels among their workmen and sometimes protected them from secret society elements, who were active in those days. Some towkays enjoyed the protection of secret societies, while other were secret society members themselves. Yinhui, or “tontines”, which were once popular in Chinese villages, are also reminiscent of the trust the Chinese had in their community leaders. Money was put in the care of an organizer, and people could borrow from a common pool. The yinhui worked well at one time because the Chinese society was close-knit, people knew each other well, and the organizers were people of repute. In later years, yinhui acquired a bad image because the organizers often ran off with the huiyin (tontine money). Besides tradition, there were other factors that served to explain the success of the DTCs. Tax avoidance is one. Many self-employed people actually shunned formal financial institutions like banks for fear of being found out by the Inland Revenue Department. Furthermore, they often trusted the community leaders more than the formal financial institutions and therefore preferred to risk putting their hard-earned money into these less reputable institutions run by these leaders, than be caught by the tax authority. Moreover, one unique characteristic of the immigrant population was that the females were not only responsible for household budgeting, but were also active contributors to the household income. The women worked as durang washers in the tin mines, engaged in petty trade, or helped the men at work. The women were forced by circumstances to save for precautionary purposes because the men in the immigrant society were known to be loose with their money, and lost a lot in activities like gambling. This might have accounted for the fact that a large proportion of depositors who lost their money in the troubled DTCs in 1986 were women. Many of the DTCs were consummate at capitalizing on personal ties. People who were respected and trusted within the community, often teachers and retired headmasters, were appointed as managers. The managers of those DTCs connected to community associations and political parties were often community leaders or party

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functionaries known to a wide circle of people. As a matter of fact, politics was absolutely important in the formation and expansion of many of these Chinese-based cooperatives. After all, it was the success of C1, which held a controlling interest in the MCA-sponsored H34, that inspired the formation of many other cooperatives and encouraged them to think big. One of the root causes of the problems faced by the cooperatives was that, like C1, the motivation and driving force behind their formation came from political and community leaders and not, as should be the case with cooperatives, from the real socioeconomic needs of ordinary members. With the 1976 amendments to the Co-operative Societies Ordinance 1948, cooperatives had more latitude to collect deposits from the public and to be involved in business and speculative activities. By using the freedom provided by the cooperatives, by tapping deep the communal sentiment and by exploiting traditional ties within the Chinese community, these Chinese elites had managed to mobilize vast capital resources. They also managed to cajole or inveigle and eventually galvanize the people into investing their life savings by convincing them of the necessity to bolster the community’s economic position in the face of perceived discrimination in the implementation of the NEP. While such an approach might be pragmatic, in reality it could be perilous. The emphasis on large-scale, centralized ventures was in fact against the spirit of the cooperative movement. Rather than being small decentralized units where there is maximum participation and scrutiny by members, the cooperatives developed into giant, centralized profit-seeking corporations. Their thousands of members scattered throughout the country had little say over what was being done to their money. The worst cases of fraud occurred in the DTCs where power was concentrated in the hands of just one or two individuals. These cooperatives had therefore deviated from the true spirit and framework of the cooperative movement that emphasizes democratic participation, cooperation for mutual benefit, service rather than profits, and prudent investment. Politics took precedence over professionalism in management and many management appointments in the DTCs were actually contingent on political affiliation. Many DTCs’ success was in actuality also connected to the perceived political and business tycoons associated with the cooperatives. To many investors, the decision to invest hinged more on who were the people behind the companies and what were their political connexions rather than the companies’ viability. Politics was so permeating that political guanxi rather economic workability became the criterion in making decisions on loans and investments. If political loyalty and affiliation deprived the managers and shareholders of their perception of flaws and failings, communalism rendered them blind. The pervasion of politics and communalism through the cooperative movement led to the obfuscation of all notions of right and wrong, legal and malfeasant, as long as it was in the interest of the political party or the ethnic group. This predictably resulted in the permeation of fraud, conflict of interests and criminal breach of trust. References Associated Chinese Chambers of Commerce of Malaysia (1974), Mahua Shanghui Shi 马华商会

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Huang Zhilian (Huang Chih Lien) 黄枝连(1972), Mahua Lishi Diaocha Yanjiu Xulun 马华历史调查

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发展 [Studies on and the Development of Chinese Associations in Malaysia]”, in Malaixiya Huatuan Zong Mingce 马来西亚华团总名册 [The General Directory of Chinese Associations in Malaysia], Kuala Lumpur: 马来西亚中华大会堂总会 Federation of Chinese Associations, Malaysia, and Petaling Jaya: 星洲日报 Sin Chew Media Corporation, pp. 22-26.

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Song Mingshun 宋明顺 (1983), “Dongnanya Huaren ji Qi Qiantu – Minzuzhuyi ji Shehuizhuyi de Chongji 东南亚华人及其前途 ―― 民族主义及社会主义的冲击 [The Southeast Asian Chinese and Their Future: The Impact of Nationalism and Socialism], in Luo Jingshan 骆静山 (ed.), Malaixiya Huaren Wenti Luncong 马来西亚华人问题论丛 [Essays on Malaysian Chinese Issues], Kangar: Persatuan Kwangtung Kongwui Perlis 玻璃市广东公会, pp. 99-114.

Suyama Taku (1962), “Pang Society: The Economy of Chinese Immigrants”, in K.G. Tregonning (ed.), Papers on Malayan History, Singapore, pp. 193-213.

Suyama Taku (1977), “Pang Societies and the Economy of Chinese Immigrants – A Study on the Communalism in Southeast Asia”, Review of Southeast Asian Studies (Nanyang Quarterly), Vol. VII, Nos. 1-4, pp. 7-27.

T’ien Ju-K’ang (1953), The Chinese of Sarawak: A Study of Social Structure, London: Department of Anthropology, London School of Economics and Political Science.

Wen Pingqiang (Voon Phin Keong) 文平强 (2005), “Malaixiya Huaren Shetuan – Juese, Gongneng yu Tezheng 马来西亚华人社团 ―― 角色、功能与特征 [Chinese Associations in Malaysia: Roles, Functions and Characteristics]”, in Malaixiya Huatuan Zong Mingce 马来西亚

华团总名册 [The General Directory of Chinese Associations in Malaysia], Kuala Lumpur: 马来西

亚中华大会堂总会 Federation of Chinese Associations, Malaysia, and Petaling Jaya: 星洲日报 Sin Chew Media Corporation, pp. 15-21.

Yeoh, Emile Kok-Kheng (2003a), "State Action, Ethnic Fragmentation and Co-Existence in Malaysia: A Public Policy Perspective", in Edmund Terence Gomez and Robert Stephens (eds), The State, Economic Development and Ethnic Co-Existence in Malaysia and New Zealand, Kuala Lumpur: Centre for Economic Development and Ethnic Relations (CEDER), University of Malaya, pp 72-117.

43

Yeoh, Emile Kok-Kheng (2003b), “Phenotypical, Linguistic or Religious? On the Concept and

Measurement of Ethnic Fragmentation”. Malaysian Journal of Economic Studies, Vol. XXXX, Nos. 1 & 2, June/December, pp. 23-47.

Yeoh, Emile Kok-Kheng (2006), “Ethnic Coexistence in a Pluralistic Environment”, GeoJournal: An International Journal on Human Geography and Environmental Sciences, Springer, Vol. 66/3, pp. 223-241.

Yeoh, Emile Kok-Kheng (2007), “Identity and Economic Development in a Multi-ethnic Society: Malaysian Chinese and the Making of the Nation”, in Voon Phin Keong (ed.), Malaysian Chinese and Nation-building: Before Merdeka and Fifty Years After – Volume 1: Historical Background and Economic Perspective, Kuala Lumpur: Centre for Malaysian Chinese Studies, pp. 187-221.

Yunaka In (1969), Kakyo Keizai Kenkyu [A Study of the Huaqiao Economy], Tokyo. Zheng Liangshu (Tay Lian Soo) 郑良树 (1981), “Dejiao de Caochuang yu Nan Bo 德教的草创与南

播 [The Founding of Dejiao and Its Spread to the South]”, in 南洋商报 (Nanyang Siang Pau), 24th May 1981.

Newspapers, Magazines and Other Periodicals ACCCIM, Jingji Jikan 经济季刊 (Quarterly Economic Bulletin – the predecessor of Business World),

Kuala Lumpur, various issues. ACCCIM, Gongshang Shijie 工商世界 (Business World monthly), Kuala Lumpur, various issues. Aliran Kesedaran Negara, Aliran: For Justice, Freedom, Solidarity (monthly), Penang, various issues. Asiaweek Ltd, Asiaweek (weekly), Hongkong, various issues. Berita Awam Sdn Bhd, Dazhong Bao 大众报 (Berita Awam triweekly), Kuala Lumpur, various issues. Berita Publishing Sdn Bhd, Malaysian Business (bimonthly), Kuala Lumpur, various issues. China Press Berhad, Xin Wanbao 新晚报 (Evening Express daily), Kuala Lumpur, various issues. Consumers’ Association of Penang, Utusan Konsumer, Penang, various issues. Da Tong Publishing Organisation Sdn Bhd, Xiawucha 下午茶 (Tea Time Magazine monthly), Petaling

Jaya, various issues. Far Eastern Economic Review Ltd, Far Eastern Economic Review (weekly), Hongkong, various issues. Life Publishers Sdn Bhd, Xin Shenghuo Bao 新生活报 (New Life Post biweekly), Petaling Jaya, various

issues. Life Publishers Sdn Bhd, Xiansheng 先生 (Mr. monthly, later weekly), Petaling Jaya, various issues. Masa Maju Sdn Bhd, Yazhou Zhoukan 亚洲周刊 (Mingguan Asia weekly), Petaling Jaya, various

issues. Multi-Purpose Management Sdn Bhd, Xiandai Qiye 现代企业 (Modern Enterprise monthly), Kuala

Lumpur, various issues. Nanyang Press (M) Sdn Bhd, Nanyang Shangbao 南洋商报 (Nanyang Siang Pau Malaysia daily),

Kuala Lumpur, various issues. The New Straits Times Press (Malaysia) Berhad, New Straits Times/New Sunday Times (daily), Kuala

Lumpur, various issues. The New Straits Times Press (Malaysia) Berhad, The Malay Mail/Sunday Mail (daily), Kuala Lumpur,

various issues. The New Straits Times Press (Malaysia) Berhad, Business Times (daily), Kuala Lumpur, various

issues. Sin Chew Jit Poh (M) Sdn Bhd, Xingzhou Ribao 星洲日报 (Sin Chew Jit Poh daily), Petaling Jaya,

various issues. Star Publications (M) Bhd, The Star/Sunday Star (daily), Petaling Jaya, various issues. Star Publications (M) Bhd, Shang Hai 商海 (monthly), Petaling Jaya, various issues. Wah Seong Press Sdn Bhd, Huashang Bao 华商报 (Wah Seong Press triweekly), Penang, various

issues. Women Publications Sdn Bhd, Renren Zhoubao 人人周报 (People’s Weekly), Petaling Jaya, various

issues.

44

ICS Working Paper Series 2005-1 SOO Kwok Tong, “Explaining International Trade between China, India and

the US”, July 2005. 2005-2 KWEK Kian Teng and THAM Siew Yean, “Malaysia-China Trade: Growth,

Opportunities and Challenges”, September 2005. 2005-3 ZHAO Wenjie and Emile Kok-Kheng YEOH, “Direct Investment from China

and the Transfer of Technology: A Malaysian Case Study”, September 2005. 2005-4 Emile Kok-Kheng YEOH and ZHAO Wenjie, “China-Malaysia Economic

Relations: Growth, Intersectoral Shift and the Determinants of Foreign Direct Investment”, October 2005.

2005-5 ZHANG Jijiao, “Social Network Used in Seeking Employment in Urban Areas:

A Survey of Over 200 Minority Interviewees in Beijing and Shenzhen”, November 2005.

2005-6 Samuel C.Y. KU, “China and Southeast Asia: Starting A Honeymoon”,

December 2005.

2006-1 C. Julia HUANG, “Taiwanese ‘Grassroots Globalization’: The Cultural Politics

of a Global Buddhist Non-Governmental Organization in Taiwan”, January 2006.

2006-2 Emile Kok-Kheng YEOH, “Ethnic Diversity, Economic Reform and Regional

Development in the People’s Republic of China”, June 2006. 2006-3 Mario Arturo RUIZ ESTRADA, “Domestic General Development of Eastern

and Western China: A Comparative Analysis“, June 2006. 2006-4 K.S. BALAKRISHNAN, “Malaysia-China Relations: The Political Challenges“,

June 2006. 2006-5 Samuel C.Y. KU, “China’s Changing Political Economy with Malaysia: A

Regional Perspective“, June 2006. 2006-6 LI Yiping, “Sino-Malaysian Relationship in the Post-Cold War Period”, July

2006. 2006-7 SHEN Hongfang, “Impacts of China's WTO Entry on the Philippine

Economy”, July 2006. 2006-8 HOU Kok Chung, “Malaysian Chinese and Cross-Strait Relations”, July 2006. 2006-9 DING Rujun and Isa MA Ziliang, “China as a Market Economy: An

Evaluation”, July 2006.

45

2006-10 ZHUANG Guotu, “Southeast Asian Research in China: A Historical Review”,

August 2006. 2006-11 LIN Mei, “Indonesian Labor Migrants in Malaysia: A Study from China”,

August 2006. 2006-12 ZHAO Hong, “China's Perspective on India's Changing Relations with

ASEAN”, August 2006. 2006-13 林開忠 LIM Khay Thiong and 王宏仁 WANG Hong Zen,

“移民研究的知識社會學考察:從東南亞外籍配偶與台商研究談起 ” [Prepositions and limitations: some observations of the studies of southeast Asian female migrants in Taiwan and Taiwanese businessmen in southeast Asia], August 2006.

2006-14 LI Yi, “Analysis of Recent Sino-Malaysian Trade Relations”, August 2006.

2007-1 Evelyn DEVADASON, “Trends in Bilateral Trade with China: Implications for

Malaysia”, March 2007. 2007-2 LooSee BEH, “Public Administration in China and Malaysia: Evidence of

Reforms”, March 2007. 2007-3 Wai-Heng LOKE, “Assessing Malaysia’s and China’s Comparative

Advantages in Selected Manufacturing Goods”, March 2007. 2007-4 Emile Kok-Kheng YEOH and Shuat-Mei OOI, “China, Malaysia and ACFTA:

FDI, Trade and Comparative Advantage”, March 2007. 2007-5 Uziel NOGUEIRA, “China-Latin America Relations in the XXI Century:

Partners or Rivals?”, April 2007. 2007-6 MUTAHIR Ahmed, “Religious Fundamentalism and China: Geopolitical

Impacts and Policy Responses”, April 2007. 2007-7 Emile Kok-Kheng YEOH, “China’s de Facto Fiscal Federalism: Challenges

and Prospects”, May 2007. 2007-8 KAMARUDING Abdulsomad, “China and Scandinavia: Economic Relations”,

May 2007. 2007-9 Emile Kok-Kheng YEOH, “China and the PTAs: Political Economy of

ACFTA”, June 2007. 2007-10 马子良 Isa MA Ziliang, “中国的清真市场:潜力和挑战” [Halal food market in

China: potentials and challenges], October 2007. 2007-11 Isa MA Ziliang, “Are There Subcultures in Chinese Culture?”, November

2007.

46

2007-12 何国忠 HOU Kok Chung, “马来西亚华团领袖(华商)与文化中国” [Malaysian

Chinese community leaders (Chinese businessmen) and cultural China], December 2007.

2008-1 Emile Kok-Kheng YEOH, “Dimensions of Poverty in China: A Preliminary

Analysis”, March 2008. 2008-2 Juliette KONING and Andreas SUSANTO, “Chinese Indonesians and a

Transforming China: Apprehension, Admiration, and Ambiguity”, March 2008. 2008-3 LEAN Hooi Hooi, “Comparative Examination of Equity Markets in Malaysia

and China”, March 2008. 2008-4 Isa Ziliang MA, “Islamic Astronomy in China: Spread and Development”,

March 2008. 2008-5 Kwok Tong SOO, “Urban Graduate Unemployment and University Reform in

China”, March 2008. 2008-6 Emile Kok-Kheng YEOH, “China’s Interregional Imbalance: Development,

Ethnicity and Socioeconomic Malaise”, April 2008. 2008-7 ZHAO Hong, “China and India's Competitive Relations with Myanmar”, April

2008. 2008-8 Evelyn DEVADASON, “Integration of China and India in Global Merchandise

Trade: The Performance of the Dragon vis-à-vis the Elephant”, April 2008. 2008-9 VOON Phin Keong, “China’s Energy Needs and Economic Relations with

Reference to Southeast Asia”, April 2008. 2008-10 Wee-Yeap LAU and Chee-Wooi HOOY, “A Study on Trade Intensity of China

with ASEAN – 1980 to 2003”, April 2008. 2008-11 K.S. BALAKRISHNAN, “Analysis on China's Military Rise and the Jittery

Reactions”, May 2008. 2008-12 Evelyn DEVADASON, “China and India in World Trade: Are the Asian Giants

a Threat to Malaysia?”, May 2008. 2008-13 CHIA Oai Peng, “Malaysian Investments in China: Market Forces or Political

Needs?”, June 2008. 2008-14 Evelyn DEVADASON, “China-India Trade Relations: New Opportunities for

Cooperation”, June 2008. 2008-15 Joanne Hoi-Lee LOH, “Equity and Economic Development in China: An

Empirical Model of Causal Determinants”, August 2008. 2008-16 Emile Kok-Kheng YEOH, “Communal Economic Movement of Chinese

Overseas: A Malaysian Case”, August 2008.

47

ICS Working Paper Series Objective and Scope: The Institute of China Studies (ICS) Working Paper Series is published to encourage the dissemination and facilitate discussion of research findings related to economic, political, social and cultural developments involving mainland China, Taiwan, Hong Kong, Macau and ethnic Chinese communities in other parts of the world, in particular Southeast Asia and Malaysia. Both empirical and theoretical studies will be considered. Information to Paper Contributors: 1) The manuscript should be submitted to:

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