World on Fire - Brownstein, Michael [18]
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Globalization and the Explosion of Chinese Wealth
Vietnam, however, is still technically a socialist country, with the state retaining control over major sectors of the economy. By contrast, in most of Southeast Asia, global markets have catapulted wealth creation—and wealth disparities—to an entirely different order of magnitude. In Thailand, Malaysia, the Philippines, and Indonesia, ethnic Chinese tycoons, richer than entire nations, oversee multibillion-dollar financial empires stretching from Shanghai to Kalimantan to Mexico City.
For several decades prior to the 1980s, most of the Southeast Asian governments pursued disastrous non-market economic policies. Starting in the 1980s and 1990s, in what the World Bank has called “the third wave of globalization,” the countries of Southeast Asia embarked on aggressive market reforms, including free trade and pro-foreign investment policies, deregulation, and privatization of state-owned enterprises. These reforms generated rapid economic growth throughout the region, particularly in the labor-intensive, export-oriented manufacturing industries. At the same time, the turn to free markets unleashed the entrepreneurial energies of Southeast Asia’s Chinese minorities, enormously enhancing their visibility and economic dominance.
Thailand, for example, was isolationist in the fifties and sixties, its economy mired in state-owned enterprises. Over the next several decades, internationalization and market-oriented policies led to the dramatic emergence of a massive export-oriented, large-scale manufacturing sector, which in turn jump-started the economy. Virtually all of the new manufacturing establishments, including the now behemoth Siam Motors, were Chinese controlled. Indeed, a recent survey of Thailand’s roughly seventy most powerful business groups found that all but three were owned by Thai Chinese. (Of these non-Chinese groups, one was controlled by the Military Bank, another by the Crown Property Bureau, and the third by a Thai-Indian family.)
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In Malaysia, too, privatization and other market policies have starkly magnified the economic dominance of the country’s Chinese minority. This is true despite extensive affirmative action policies for the indigenous Malay majority, which have been in place ever since bloody anti-Chinese riots in 1969 left nearly a thousand dead in Kuala Lumpur. Today, the Malaysian Chinese—the largest Chinese minority in Southeast Asia, representing about a third of the population—account for 70 percent of the country’s market capitalization.
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A good portion of this 70 percent figure is attributable to Robert Kuok, who started off selling palm oil but now commands a sprawling business empire that includes everything from manufacturing to real estate (including hotels in Burma) to media. Kuok is “the quintessential Asian tycoon,” The Economist wrote recently, “amassing wealth, spreading it across countries and industries to reduce risk, and above all keeping quiet about it.” “Gregarious and chatty, Mr. Kuok nevertheless ensures that virtually nothing of substance is known about him.” When an international investigative agency probed into Kuok’s empire a few years ago, this is the profile they came up with: “Name—Robert Kuok; political affiliation—unknown; adversaries—none identified; litigation—nothing known; ambitions—not known.” According to Forbes in 2002, the Kuok group’s net worth is around $4 billion.
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Chinese market dominance in the Philippines is equally striking, if slightly more complex. Filipino Chinese range widely in cultural identity: from highly assimilated, fourth-generation Chinese mestizo families, like the Cojuangcos; to relatively recent immigrants like my own family, who retain more of their Chinese